UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

FOR THE QUARTERLY PERIOD ENDED ~~June~~September 30, 2021

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

COMMISSION FILE NUMBER: 001-37796

Infrastructure & 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. ☑ 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). ☑ 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 ☐ Non-accelerated filer ☑ Smaller reporting company ☑ Emerging growth company ☐

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 ☑ No

Number of shares of Common Stock outstanding as of the close of business on ~~July 28,~~November 8, 2021: ~~25,150,306.~~47,974,783.


	Infrastructure and Energy Alternatives, Inc.
	Table of Contents

	PART I. FINANCIAL INFORMATION

Item 1	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Income	2
	Condensed Consolidated Statements of Stockholders' Equity (Deficit)	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Condensed Consolidated Financial Statements	6

Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	2327
Item 3	Quantitative and Qualitative Disclosures About Market Risk	3844
Item 4	Controls and Procedures	3844

	Part II. OTHER INFORMATION
Item 1	Legal Proceedings	3945
Item 1A	Risk Factors	3945
Item 5	Other Information	45
Item 6	Exhibits	3945

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INFRASTRUCTURE AND ENERGY ALTERNATIVES, INC.

Condensed Consolidated Balance Sheets

($ in thousands, except per share data)

(Unaudited)


		June 30, 2021		December 31, 2020			September 30, 2021		December 31, 2020
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	117,674	$	164,041	Cash and cash equivalents	$	158,262	$	164,041
Accounts receivable, net	Accounts receivable, net	232,323		163,793		Accounts receivable, net	327,406		163,793
Contract assets	Contract assets	176,958		145,183		Contract assets	222,659		145,183
Prepaid expenses and other current assets	Prepaid expenses and other current assets	33,007		19,352		Prepaid expenses and other current assets	22,147		19,352

Total current assets	Total current assets	559,962		492,369		Total current assets	730,474		492,369

Property, plant and equipment, net	Property, plant and equipment, net	135,514		130,746		Property, plant and equipment, net	140,512		130,746
Operating lease assets	Operating lease assets	37,701		36,461		Operating lease assets	37,046		36,461
Intangible assets, net	Intangible assets, net	22,202		25,434		Intangible assets, net	20,585		25,434
Goodwill	Goodwill	37,373		37,373		Goodwill	37,373		37,373
Company-owned life insurance	Company-owned life insurance	4,760		4,250		Company-owned life insurance	4,793		4,250
Deferred income taxes	Deferred income taxes	295		2,069		Deferred income taxes	—		2,069
Other assets	Other assets	533		438		Other assets	771		438
Total assets	Total assets	$	798,340	$	729,140	Total assets	$	971,554	$	729,140

Liabilities and Stockholder's Equity (Deficit)
Liabilities and Stockholders' Equity (Deficit)						Liabilities and Stockholders' Equity (Deficit)
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	149,352	$	104,960	Accounts payable	$	199,487	$	104,960
Accrued liabilities	Accrued liabilities	201,828		129,594		Accrued liabilities	196,623		129,594
Contract liabilities	Contract liabilities	90,566		118,235		Contract liabilities	146,281		118,235

Current portion of finance lease obligations	Current portion of finance lease obligations	24,842		25,423		Current portion of finance lease obligations	24,724		25,423
Current portion of operating lease obligations	Current portion of operating lease obligations	9,817		8,835		Current portion of operating lease obligations	10,196		8,835
Current portion of long-term debt	Current portion of long-term debt	2,277		2,506		Current portion of long-term debt	2,309		2,506

Total current liabilities	Total current liabilities	478,682		389,553		Total current liabilities	579,620		389,553

Finance lease obligations, less current portion	Finance lease obligations, less current portion	27,370		32,146		Finance lease obligations, less current portion	28,126		32,146

Operating lease obligations, less current portion	Operating lease obligations, less current portion	29,355		29,154		Operating lease obligations, less current portion	28,332		29,154
Long-term debt, less current portion	Long-term debt, less current portion	161,266		159,225		Long-term debt, less current portion	290,630		159,225
Debt - Series B Preferred Stock	Debt - Series B Preferred Stock	176,556		173,868		Debt - Series B Preferred Stock	—		173,868
Warrant obligations	Warrant obligations	8,834		9,200		Warrant obligations	18,848		9,200

Deferred compensation	Deferred compensation	7,930		8,672		Deferred compensation	7,634		8,672

Deferred income taxes						Deferred income taxes	1,953		—
Total liabilities	Total liabilities	$	889,993	$	801,818	Total liabilities	$	955,143	$	801,818

Commitments and contingencies:	Commitments and contingencies:	0		0		Commitments and contingencies:	0		0

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 June 30, 2021 and December 31, 2020, respectively		17,483		17,483
Series A Preferred Stock, par value, $0.0001 per share; 1,000,000 shares authorized; 17,483 shares issued and outstanding at December 31, 2020						Series A Preferred Stock, par value, $0.0001 per share; 1,000,000 shares authorized; 17,483 shares issued and outstanding at December 31, 2020	—		17,483

Stockholders' equity (deficit):	Stockholders' equity (deficit):					Stockholders' equity (deficit):
Common stock, par value, $0.0001 per share; 150,000,000 and 150,000,000 shares authorized; 25,150,306 and 21,008,745 shares issued and 25,150,306 and 21,008,745 outstanding at June 30, 2021 and December 31, 2020, respectively		3		2
Common stock, par value, $0.0001 per share; 150,000,000 and 150,000,000 shares authorized; 44,553,902 and 21,008,745 shares issued and 44,553,902 and 21,008,745 outstanding at September 30, 2021 and December 31, 2020, respectively						Common stock, par value, $0.0001 per share; 150,000,000 and 150,000,000 shares authorized; 44,553,902 and 21,008,745 shares issued and 44,553,902 and 21,008,745 outstanding at September 30, 2021 and December 31, 2020, respectively	4		2

Additional paid in capital	Additional paid in capital	32,064		35,305		Additional paid in capital	257,259		35,305
Accumulated deficit	Accumulated deficit	(141,203)		(125,468)		Accumulated deficit	(240,852)		(125,468)
Total stockholders' deficit		(109,136)		(90,161)
Total liabilities and stockholders' deficit		$	798,340	$	729,140
Total stockholders' equity (deficit)						Total stockholders' equity (deficit)	16,411		(90,161)
Total liabilities and stockholders' equity (deficit)						Total liabilities and stockholders' equity (deficit)	$	971,554	$	729,140

See accompanying notes to condensed consolidated financial statements.

INFRASTRUCTURE AND ENERGY ALTERNATIVES, INC.

Condensed Consolidated Statements of Operations

($ in thousands, except per share data)

(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
2021 2020 2021 2020
Revenue $ 560,148 $ 480,604 $ 836,560 $ 838,767
Cost of revenue 506,665 426,363 766,536 751,485
Gross profit 53,483 54,241 70,024 87,282
Selling, general and administrative expenses 30,894 28,074 55,740 57,558
Income from operations 22,589 26,167 14,284 29,724
Other income (expense), net:
Interest expense, net (14,495) (16,200) (28,854) (32,265)
Other income (expense) 770 (1,631) 608 (2,733)
Income (loss) before benefit for income taxes 8,864 8,336 (13,962) (5,274)
Provision for income taxes (4,165) (4,739) (1,773) (3,872)
Net income (loss) $ 4,699 $ 3,597 $ (15,735) $ (9,146)
Less: Convertible Preferred Stock dividends (676) (606) (1,332) (1,372)
Less: Net income allocated to participating securities (788) (802) 0 0
Net income (loss) available for common stockholders $ 3,235 $ 2,189 $ (17,067) $ (10,518)
Net income (loss) per common share - basic 0.13 0.11 (0.72) (0.51)
Net income (loss) per common share - diluted 0.12 0.09 (0.72) (0.51)
Weighted average shares - basic 24,471,286 20,751,673 23,768,413 20,636,944
Weighted average shares - diluted 33,439,303 39,978,382 23,768,413 20,636,944


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Revenue	$	697,759	$	522,232	$	1,534,319	$	1,360,999
Cost of revenue	625,589		463,343		1,392,125		1,214,828
Gross profit	72,170		58,889		142,194		146,171

Selling, general and administrative expenses	36,539		29,656		92,279		87,214

Income from operations	35,631		29,233		49,915		58,957

Other income (expense), net:
Interest expense, net	(9,403)		(14,975)		(38,257)		(47,240)

Loss on extinguishment of debt	(101,006)		—		(101,006)		—
Warrant liability fair value adjustment	(17,582)		3,000		(17,216)		171
Other income (expense)	(5,040)		161		(4,798)		257
Income (loss) before provision for income taxes	(97,400)		17,419		(111,362)		12,145

Provision for income taxes	(2,249)		(6,153)		(4,022)		(10,025)

Net income (loss)	$	(99,649)	$	11,266	$	(115,384)	$	2,120
Less: Convertible Preferred Stock dividends	(255)		(619)		(1,587)		(1,991)


Less: Net income allocated to participating securities	—		(2,854)		—		(35)
Net income (loss) available for common stockholders	$	(99,904)	$	7,793	$	(116,971)	$	94


Net income (loss) per common share - basic	(2.63)		0.37		(4.09)		—
Net income (loss) per common share - diluted	(2.63)		0.32		(4.09)		—
Weighted average shares - basic	38,038,055		20,968,271		28,577,230		20,748,193
Weighted average shares - diluted	38,038,055		35,336,064		28,577,230		20,748,193

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, 2019 20,461 $ 2 $ 17,167 (14) $ (76) $ (126,196) $ (109,103)
Net loss — — — — — (12,743) (12,743)
Share-based compensation — — 1,113 — — — 1,113
Equity plan compensation 240 0 280 (38) (84) — 196
Series B Preferred Stock - Warrants at close — — 15,631 — — — 15,631
Series A Preferred dividends — — (766) — — — (766)
Balance at March 31, 2020 20,701 $ 2 $ 33,425 (52) $ (160) $ (138,939) $ (105,672)
Net income — — — — — 3,597 3,597
Share-based compensation — — 844 — — — 844
Equity plan compensation 441 0 800 (129) (235) — 565
Series A Preferred dividends — — (606) — — — (606)
Balance at June 30, 2020 21,142 $ 2 $ 34,463 (181) $ (395) $ (135,342) $ (101,272)
Balance at December 31, 2020 21,009 $ 2 $ 35,305 0 $ 0 $ (125,468) $ (90,161)
Net loss — — — — — (20,434) (20,434)
Earnout Shares 1,803 — — — — — —
Share-based compensation — — 727 — — — 727
Equity plan compensation 521 — (2,909) — — — (2,909)
Exercise of warrants 15 — — — — — —
Series A Preferred dividends — — (656) — — — (656)
Balance at March 31, 2021 23,348 $ 2 $ 32,467 0 $ 0 $ (145,902) $ (113,433)
Net loss — — — — — 4,699 4,699
Share-based compensation — — 1,926 — — — 1,926
Equity plan compensation 249 — (1,853) — — — (1,853)
Exercise of warrants 1,553 1 200 — — — 201
Series A Preferred dividends — — (676) — — — (676)
Balance at June 30, 2021 25,150 $ 3 $ 32,064 0 $ 0 $ (141,203) $ (109,136)


	Common Stock			Additional Paid-in Capital		Treasury Stock			Accumulated Deficit		Total Equity (Deficit)
	Shares	Par Value				Shares	Cost




































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	—	—		1,113		—	—		—		1,113
Equity plan compensation	240	—		280		(38)	(84)		—		196
Series B Preferred Stock - Warrants at close	—	—		15,631		—	—		—		15,631
Series A Preferred dividends	—	—		(766)		—	—		—		(766)
Balance at March 31, 2020	20,701	$	2	$	33,425	(52)	$	(160)	$	(138,939)	$	(105,672)
Net income	—	—		—		—	—		3,597		3,597
Share-based compensation	—	—		844		—	—		—		844
Equity plan compensation	441	—		800		(129)	(235)		—		565
Series A Preferred dividends	—	—		(606)		—	—		—		(606)
Balance at June 30, 2020	21,142	$	2	$	34,463	(181)	$	(395)	$	(135,342)	$	(101,272)
Net income	—	—		—		—	—		11,266		11,266
Share-based compensation	—	—		1,110		—	—		—		1,110
Equity plan compensation	23	—		(42)		—	—		—		(42)

Retirement of treasury shares	(181)	—		(395)		181	395		—		—
Series A Preferred dividends	—	—		(619)		—	—		—		(619)
Balance at September 30, 2020	20,984	$	2	$	34,517	—	$	—	$	(124,076)	$	(89,557)

Balance at December 31, 2020	21,009	$	2	$	35,305	—	$	—	$	(125,468)	$	(90,161)
Net loss	—	—		—		—	—		(20,434)		(20,434)
Earnout Shares	1,803	—		—		—	—		—		—
Share-based compensation	—	—		727		—	—		—		727
Equity plan compensation	521	—		(2,909)		—	—		—		(2,909)
Exercise of warrants	15	—		—		—	—		—		—
Series A Preferred dividends	—	—		(656)		—	—		—		(656)
Balance at March 31, 2021	23,348	$	2	$	32,467	—	$	—	$	(145,902)	$	(113,433)
Net income	—	—		—		—	—		4,699		4,699

Share-based compensation	—	—		1,926		—	—		—		1,926
Equity plan compensation	249	—		(1,853)		—	—		—		(1,853)
Exercise of warrants	1,553	1		200		—	—		—		201
Series A Preferred dividends	—	—		(676)		—	—		—		(676)
Balance at June 30, 2021	25,150	$	3	$	32,064	—	$	—	$	(141,203)	$	(109,136)
Net loss	—	—		—		—	—		(99,649)		(99,649)
Share-based compensation	—	—		1,526		—	—		—		1,526
Equity plan compensation	78	—		(579)		—	—		—		(579)
Issuance of Common Stock	10,548	1		193,480		—	—		—		193,481
Series A Preferred Stock conversion	2,132	—		23,455		—	—		—		23,455
Issuance of Anti-Dilution Shares	649	—		7,568		—	—		—		7,568
Exercise of warrants	5,996	—		—		—	—		—		—
Series A Preferred dividends	—	—		(255)		—	—		—		(255)
Balance at September 30, 2021	44,553	4		257,259		—	—		(240,852)		16,411

See accompanying notes to condensed consolidated financial statements.

INFRASTRUCTURE AND ENERGY ALTERNATIVES, INC.

Condensed Consolidated Statements of Cash Flows

($ in thousands)

(Unaudited)


		Six Months Ended June 30,					Nine Months Ended September 30,
		2021		2020			2021		2020
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net loss		$	(15,735)	$	(9,146)
Net income (loss)						Net income (loss)	$	(115,384)	$	2,120
Adjustments to reconcile net loss to net cash used in operating activities:	Adjustments to reconcile net loss to net cash used in operating activities:					Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	Depreciation and amortization	21,830		24,001		Depreciation and amortization	34,407		36,566

Warrant liability fair value adjustment	Warrant liability fair value adjustment	(366)		2,828		Warrant liability fair value adjustment	17,216		(171)

Amortization of debt discounts and issuance costs		5,814		5,379
�� Amortization of debt discounts and issuance costs						�� Amortization of debt discounts and issuance costs	7,443		9,343
Loss on extinguishment of debt						Loss on extinguishment of debt	101,006		—
Share-based compensation expense	Share-based compensation expense	2,653		1,957		Share-based compensation expense	4,179		3,067
Loss on sale of equipment	Loss on sale of equipment	0		574		Loss on sale of equipment	—		1,251
Deferred compensation	Deferred compensation	(742)		(830)		Deferred compensation	(1,038)		(139)

Accrued dividends on Series B Preferred Stock	Accrued dividends on Series B Preferred Stock	—		7,959		Accrued dividends on Series B Preferred Stock	—		7,959
Deferred income taxes	Deferred income taxes	1,773		3,659		Deferred income taxes	4,022		9,814
Other, net	Other, net	(172)		227		Other, net	(325)		287
Change in operating assets and liabilities:	Change in operating assets and liabilities:					Change in operating assets and liabilities:
Accounts receivable	Accounts receivable	(68,531)		(8,349)		Accounts receivable	(163,613)		17,327
Contract assets	Contract assets	(31,775)		(41,565)		Contract assets	(77,476)		(37,210)
Prepaid expenses and other assets	Prepaid expenses and other assets	(13,752)		(16,685)		Prepaid expenses and other assets	(3,130)		(3,288)
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	115,294		(42,097)		Accounts payable and accrued liabilities	165,943		(64,089)
Contract liabilities	Contract liabilities	(27,669)		7,458		Contract liabilities	28,046		(41,635)
Net cash used in operating activities		(11,378)		(64,630)
Net cash provided by (used in) operating activities						Net cash provided by (used in) operating activities	1,296		(58,798)

Cash flow from investing activities:	Cash flow from investing activities:					Cash flow from investing activities:
Company-owned life insurance	Company-owned life insurance	(510)		812		Company-owned life insurance	(542)		847
Purchases of property, plant and equipment	Purchases of property, plant and equipment	(14,649)		(5,171)		Purchases of property, plant and equipment	(24,013)		(6,727)
Proceeds from sale of property, plant and equipment	Proceeds from sale of property, plant and equipment	1,527		2,837		Proceeds from sale of property, plant and equipment	3,512		4,151

Net cash used in investing activities	Net cash used in investing activities	(13,632)		(1,522)		Net cash used in investing activities	(21,043)		(1,729)

Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds from long-term debt	Proceeds from long-term debt	0		72,000		Proceeds from long-term debt	300,000		72,000
Payments on long-term debt	Payments on long-term debt	(1,314)		(82,357)		Payments on long-term debt	(1,934)		(83,201)

Extinguishment of debt						Extinguishment of debt	(173,345)		—
Extinguishment of Series B Preferred Stock						Extinguishment of Series B Preferred Stock	(264,937)		—
Debt financing fees						Debt financing fees	(11,415)		—
Payments on finance lease obligations	Payments on finance lease obligations	(15,481)		(12,468)		Payments on finance lease obligations	(22,742)		(19,301)

Proceeds from issuance of Common Stock						Proceeds from issuance of Common Stock	193,481		—
Proceeds from issuance of Series B Preferred Stock	Proceeds from issuance of Series B Preferred Stock	0		350		Proceeds from issuance of Series B Preferred Stock	—		350
Proceeds of issuance of employee stock awards	Proceeds of issuance of employee stock awards	0		760		Proceeds of issuance of employee stock awards	—		718
Shares repurchased for tax withholding on release of restricted stock units		(4,762)		0
Shares for tax withholding on release of restricted stock units						Shares for tax withholding on release of restricted stock units	(5,341)		—
Proceeds from exercise of warrants	Proceeds from exercise of warrants	200		0		Proceeds from exercise of warrants	201		—
Net cash used in financing activities		$	(21,357)	$	(21,715)
Net cash provided by (used in) financing activities						Net cash provided by (used in) financing activities	$	13,968	$	(29,434)

Net change in cash and cash equivalents	Net change in cash and cash equivalents	(46,367)		(87,867)		Net change in cash and cash equivalents	(5,779)		(89,961)

Cash and cash equivalents, beginning of the period	Cash and cash equivalents, beginning of the period	164,041		147,259		Cash and cash equivalents, beginning of the period	164,041		147,259

Cash and cash equivalents, end of the period	Cash and cash equivalents, end of the period	$	117,674	$	59,392	Cash and cash equivalents, end of the period	$	158,262	$	57,298

See accompanying notes to condensed consolidated financial statements.

INFRASTRUCTURE AND ENERGY ALTERNATIVES, INC.

Condensed Consolidated Statements of Cash Flows

($ in thousands)

(Unaudited)

(Continued)


		Six Months Ended June 30,			Nine Months Ended September 30,
		2021	2020		2021	2020
Supplemental disclosures:	Supplemental disclosures:			Supplemental disclosures:
Cash paid for interest	Cash paid for interest	14,892	17,821	Cash paid for interest	30,830	30,149
Cash paid (received) for income taxes	Cash paid (received) for income taxes	3,271	(735)	Cash paid (received) for income taxes	3,478	(955)
Schedule of non-cash activities:	Schedule of non-cash activities:			Schedule of non-cash activities:
Acquisition of assets/liabilities through finance lease	Acquisition of assets/liabilities through finance lease	10,125	7,635	Acquisition of assets/liabilities through finance lease	18,562	11,691
Acquisition of assets/liabilities through operating lease	Acquisition of assets/liabilities through operating lease	6,265	5,295	Acquisition of assets/liabilities through operating lease	8,200	6,028

Series A Preferred dividends declared	Series A Preferred dividends declared	1,332	1,372	Series A Preferred dividends declared	1,587	1,991

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”).

We segregate our business into 2 reportable segments: the Renewables segment and the Heavy Civil and Industrial (“Specialty Civil”) segment. See Note 10. Segments for a description of the reportable segments and their operations.

Principles of Consolidation

The accompanying unaudited condensed 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 consolidated financial statements include the accounts of IEA and its wholly-owned domestic and foreign subsidiaries. The Company occasionally forms joint ventures with unrelated third parties for the execution of single contracts or projects. The Company assesses its joint ventures to determine if they meet the qualifications of a variable interest entity (“VIE”) in accordance with Accounting Standard Codification (“ASC”) Topic 810, Consolidation. For construction joint ventures that are not VIEs or fully consolidated but for which the Company has significant influence, the Company accounts for its interest in the joint ventures using the proportionate consolidation method, see Note 11. Joint Ventures.

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 ~~six~~nine months ended ~~June~~September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2020 and notes thereto included in the Company’s 2020 Annual Report on Form 10-K.

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 revenue and project profit or loss; fair value estimates; valuations of goodwill and intangible assets; asset lives used in computing depreciation and amortization; accrued self-insured claims; other reserves and accruals; accounting for income taxes; and the estimated impact of contingencies and ongoing litigation. While management believes that 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.

The prior period classification of the warrant liability fair value adjustment has been revised to conform to the current period presentation within the Condensed Consolidated Statements of Operations. This reclassification has no effect on net income or stockholders' equity.

Revenue Recognition

The Company derives revenue primarily from construction projects performed under contracts for specific projects requiring the construction and installation of an entire infrastructure system or specified units within an infrastructure system. Contracts contain multiple pricing options, such as fixed price, time and materials, or unit price. Generally, renewable energy projects are performed for private customers while Specialty Civil projects are performed for various governmental entities.

Revenue derived from projects billed on a fixed-price basis totaled ~~99.3%~~99.5% and ~~98.0%~~98.4% of consolidated revenue from operations for the three months ended ~~June~~September 30, 2021 and 2020, respectively, and totaled ~~98.3%~~98.8% and ~~97.2%~~97.6% for the ~~six~~nine months

ended ~~June~~September 30, 2021 and 2020, respectively. Revenue and related costs for 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 totaled ~~0.7%~~0.5% and ~~2.0%~~1.6% of consolidated revenue from operations for the three months ended ~~June~~September 30, 2021 and 2020, respectively, and totaled ~~1.7%~~1.2% and ~~2.8%~~2.4% for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, respectively.

Construction contract revenue is recognized over time using the cost-to-cost measure of progress for fixed price 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 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 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 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 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 contractual promise to transfer a distinct good or service to the customer and is the unit of account under Accounting Standards Codification (“ASC”) Topic 606. The transaction price of a contract is allocated to distinct performance obligations and recognized as revenue when or as the performance obligations are 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 generally 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 ~~June~~September 30, 2021, the amount of the Company’s remaining performance obligations was ~~$1,665.3~~$1,686.7 million. The Company expects to recognize approximately ~~75.7%~~75.5% of its remaining performance obligations as revenue during the next twelve months. Revenue recognized from performance obligations satisfied in previous periods was ~~$(0.8)~~$(0.7) million and ~~$(1.6)~~$(0.8) million for the three months ended ~~June~~September 30, 2021 and 2020, respectively, and ~~$(0.4)~~$(1.1) million and ~~$(3.6)~~$(4.4) million for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, 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 the 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 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 the transaction price are not resolved in the Company’s favor, or to the extent incentives reflected in the transaction price are not earned, there could be reductions in, or reversals of, previously recognized revenue.

As of ~~June~~September 30, 2021 and December 31, 2020, the Company included approximately ~~$51.4~~$70.8 million and $52.6 million, respectively, of unapproved change orders and/or 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 appropriate. The Company actively engages with its customers to complete the final change order approval process, and generally expects these processes to be completed within one year. Amounts ultimately realized upon final acceptance by customers could be higher or lower than such estimated amounts.

Disaggregation of Revenue

The following tables disaggregate revenue by customers and services performed, which the Company believes best depicts the nature, amount, timing and uncertainty of its revenue:


(in thousands)	(in thousands)	Three Months Ended				Six Months Ended				(in thousands)	Three Months Ended				Nine Months Ended
		June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020			September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Renewables Segment	Renewables Segment									Renewables Segment
Wind	Wind	$	317,066	$	317,151	463,924		$	565,688	Wind	$	416,890	$	261,754	880,814		$	827,442
Solar	Solar	107,788		7,111		141,304		7,320		Solar	100,282		65,297		241,586		72,617
		$	424,854	$	324,262	$	605,228	$	573,008		$	517,172	$	327,051	$	1,122,400	$	900,059

Specialty Civil Segment	Specialty Civil Segment									Specialty Civil Segment
Heavy civil	Heavy civil	$	78,884	$	103,721	127,756		$	144,943	Heavy civil	$	102,046	$	119,713	229,802		$	264,656
Rail	Rail	31,173		32,321		58,040		79,378		Rail	35,226		52,955		93,266		132,333
Environmental	Environmental	25,237		20,300		45,536		41,438		Environmental	43,315		22,513		88,851		63,951
		$	135,294	$	156,342	$	231,332	$	265,759		$	180,587	$	195,181	$	411,919	$	460,940

Concentrations

The Company ~~had the following approximate~~did not have any revenue ~~and accounts receivable~~ concentrations ~~net of allowances,~~above 10% for the ~~periods ended:~~

Revenue % Revenue %
Three Months Ended Six Months Ended Accounts Receivable %
June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020 June 30, 2021 December 31, 2020
Renewables and Specialty Civil Segments 11.0 % * 12.0 % * * *

* Amount wasthree and nine months ended September 30, 2021 and 2020, respectively. The Company did not have any accounts recievable concentrations above 10% ~~threshold~~as of September 30, 2021 and 2020, respectively.

Construction Joint Ventures

Certain contracts are executed through joint ventures. The arrangements are often formed for the execution of single contracts or projects and allow the Company to share risks and secure specialty skills required for project execution.

In accordance with ASC Topic 810, Consolidation, the Company assesses its joint ventures at inception to determine if any meet the qualifications of a VIE. The Company considers a joint venture a VIE if either (a) the total equity investment is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) characteristics of a controlling financial interest are missing (either the ability to make decisions through voting or other rights, the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the entity), or (c) the voting rights of the equity holders are not proportional to their obligations to absorb the expected losses of the entity and/or their rights to receive the expected residual returns of the entity and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. Upon the occurrence of certain events outlined in ASC 810, the Company reassesses its initial determination of whether the joint venture is a VIE.

The Company also evaluates whether it is the primary beneficiary of each VIE and consolidates the VIE if the Company has both (a) the power to direct the economically significant activities of the entity, and (b) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. The Company considers the contractual agreements that define the ownership structure, distribution of profits and losses, risks,

responsibilities, indebtedness, voting rights and board representation of the respective parties in determining whether it qualifies as the primary beneficiary. The Company also considers all parties that have direct or implicit variable interests when determining whether it is the primary beneficiary. When the Company is determined to be the primary beneficiary, the VIE is consolidated. In accordance with ASC 810, management’s assessment of whether the Company is the primary beneficiary of a VIE is performed continuously.

Construction joint ventures that do not involve a VIE, or for which the Company is not the primary beneficiary, are evaluated for consolidation under the voting interest model that considers whether the Company owns or controls more than 50% of the voting interest in the joint venture. For construction joint ventures that are not consolidated but for which the Company has significant influence, the Company accounts for its interest in the joint ventures using the proportionate consolidation method, whereby the Company’s proportionate share of the joint ventures’ assets, liabilities, revenue and cost of operations are included in the appropriate classifications in the Company’s consolidated financial statements. See Note 11. Joint Ventures for additional discussion regarding joint ventures.

Recently Adopted Accounting Standards - Guidance Adopted in ~~2020~~2021

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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. The Company adopted the standard on January 1, 2021 on a prospective basis, which did not have an impact on our disclosures for income taxes.

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. The Company is still evaluating the new standard but dodoes not expect it to have a material impact on our estimate of the allowance for uncollectible accounts.

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.

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 COVID-19 pandemic has significantly affected economic conditions in the United States 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 Company believes that the COVID-19 pandemic ~~has~~did not ~~had~~have a material adverse impact on the Company’s financial results for the period ended ~~June~~September 30, 2021. Currently, most of the Company’s construction services are deemed essential under governmental mitigation orders and all of our business segments continue to operate. The Company has issued several notices of force majeure for the purpose of recognizing delays in construction schedules due to COVID-19 outbreaks on certain of its work sites and has also received notices of force majeure from the owners of certain projects and certain subcontractors. Management does not believe that any delays on projects related to these events of force majeure will have a material impact on ~~its~~the Company's results of operations.

Management’s top priority has been to take appropriate actions to protect the health and safety of the Company's employees, customers and business partners, including adjusting the Company's 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; however, given the uncertainty regarding the potential effects of the COVID-19 pandemic, any future impacts cannot be quantified or predicted with specificity.

The effects of the COVID-19 pandemic could affect the Company’s future business activities and financial results, including new contract awards, reduced crew productivity, contract amendments or cancellations, higher operating costs or delayed project start dates or project shutdowns that may be requested or mandated by governmental authorities or others.

Note 2. Contract Assets and Liabilities

The timing of when we bill our customers is generally dependent upon agreed-upon contractual terms, milestone billings based on the completion of certain phases of the work, or when services are provided. Sometimes, billing occurs subsequent to revenue recognition, resulting in unbilled revenue, which is accounted for as a contract asset. Sometimes we receive advance payments or deposits from our customers before revenue is recognized, resulting in deferred revenue, which is accounted for as a contract liability.

Contract assets in the Condensed Consolidated Balance Sheets represent the following:

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

•retainage amounts for the portion of the contract price billed by us for work performed but held for payment by the customer as a form of security until we reach certain construction milestones or complete the project.

Contract assets consisted of the following:


(in thousands)	(in thousands)	June 30, 2021		December 31, 2020		(in thousands)	September 30, 2021		December 31, 2020
Costs and estimated earnings in excess of billings on uncompleted contracts	Costs and estimated earnings in excess of billings on uncompleted contracts	$	83,869	$	51,367	Costs and estimated earnings in excess of billings on uncompleted contracts	$	113,296	$	51,367
Retainage receivable	Retainage receivable	93,089		93,816		Retainage receivable	109,363		93,816
		$	176,958	$	145,183		$	222,659	$	145,183

Contract liabilities consist of the following:


(in thousands)	(in thousands)	June 30, 2021		December 31, 2020		(in thousands)	September 30, 2021		December 31, 2020
Billings in excess of costs and estimated earnings on uncompleted contracts	Billings in excess of costs and estimated earnings on uncompleted contracts	$	90,557	$	117,641	Billings in excess of costs and estimated earnings on uncompleted contracts	$	146,156	$	117,641
Loss on contracts in progress	Loss on contracts in progress	9		594		Loss on contracts in progress	125		594
		$	90,566	$	118,235		$	146,281	$	118,235

Revenue recognized for the three and ~~six~~nine months ended ~~June~~September 30, 2021 that was included in the contract liability balance at December 31, 2020 was approximately ~~$24.2~~$2.1 million and ~~$112.0~~$114.1 million, respectively, and revenue recognized for the three and ~~six~~nine months ended ~~June~~September 30, 2020 that was included in the contract liability balance at December 31, 2019 was approximately ~~$17.8~~$5.8 million and ~~$108.7 million.~~$114.5 million, respectively.

Activity in the allowance for doubtful accounts for the periods indicated was as follows:


		Three Months Ended				Six Months Ended					Three Months Ended				Nine Months Ended
		June 30,				June 30,					September 30,				September 30,
(in thousands)	(in thousands)	2021		2020		2021		2020		(in thousands)	2021		2020		2021		2020
Allowance for doubtful accounts at beginning of period	Allowance for doubtful accounts at beginning of period	$	0	$	89	$	0	$	75	Allowance for doubtful accounts at beginning of period	$	—	$	89	$	—	$	75
Plus: provision for (reduction in) allowance	Plus: provision for (reduction in) allowance	0		0		0		14		Plus: provision for (reduction in) allowance	—		—		—		14
Less: write-offs, net of recoveries	Less: write-offs, net of recoveries	0		0		0		0		Less: write-offs, net of recoveries	—		—		—		—
Allowance for doubtful accounts at period end	Allowance for doubtful accounts at period end	$	0	$	89	$	0	$	89	Allowance for doubtful accounts at period end	$	—	$	89	$	—	$	89

Note 3. Property, Plant and Equipment, Net

Property, plant and equipment consisted of the following:


(in thousands)	(in thousands)	June 30, 2021		December 31, 2020		(in thousands)	September 30, 2021		December 31, 2020
Buildings and leasehold improvements	Buildings and leasehold improvements	$	5,667	$	4,402	Buildings and leasehold improvements	$	6,263	$	4,402
Land	Land	17,600		17,600		Land	17,600		17,600
Construction equipment	Construction equipment	212,304		192,402		Construction equipment	225,143		192,402
Office equipment, furniture and fixtures	Office equipment, furniture and fixtures	3,637		3,620		Office equipment, furniture and fixtures	3,642		3,620
Vehicles	Vehicles	7,538		7,326		Vehicles	7,888		7,326
		246,746		225,350			260,536		225,350
Accumulated depreciation	Accumulated depreciation	(111,232)		(94,604)		Accumulated depreciation	(120,024)		(94,604)
Property, plant and equipment, net	Property, plant and equipment, net	$	135,514	$	130,746	Property, plant and equipment, net	$	140,512	$	130,746

Depreciation expense of property, plant and equipment was ~~$9,415~~$10,960 and ~~$8,777~~$9,282 for the three months ended ~~June~~September 30, 2021 and 2020, respectively, and was ~~$18,598~~$29,558 and ~~$17,293~~$26,575 for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, respectively.

Note 4. Goodwill and Intangible Assets, Net

The following table provides the changes in the carrying amount of goodwill, by segment:


(in thousands)	(in thousands)	Renewables		Specialty Civil		Total		(in thousands)	Renewables		Specialty Civil		Total
January 1, 2020	January 1, 2020	$	3,020	$	34,353	$	37,373	January 1, 2020	$	3,020	$	34,353	$	37,373
Adjustments	Adjustments	0		0		0		Adjustments	—		—		—
December 31, 2020	December 31, 2020	$	3,020	$	34,353	$	37,373	December 31, 2020	$	3,020	$	34,353	$	37,373
Adjustments	Adjustments	0		0		0		Adjustments	—		—		—
June 30, 2021		$	3,020	$	34,353	$	37,373
September 30, 2021								September 30, 2021	$	3,020	$	34,353	$	37,373

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


		June 30, 2021							December 31, 2020								September 30, 2021							December 31, 2020
($ in thousands)	($ 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	($ 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
Customer relationships	Customer relationships	$	26,500	$	(10,373)	$	16,127	4.5 years	$	26,500	$	(8,481)	$	18,019	5 years	Customer relationships	$	26,500	$	(11,320)	$	15,180	4.25 years	$	26,500	$	(8,481)	$	18,019	5 years
Trade name	Trade name	13,400		(7,325)		6,075		2.5 years	13,400		(5,985)		7,415		3 years	Trade name	13,400		(7,995)		5,405		2.25 years	13,400		(5,985)		7,415		3 years

		$	39,900	$	(17,698)	$	22,202		$	39,900	$	(14,466)	$	25,434			$	39,900	$	(19,315)	$	20,585		$	39,900	$	(14,466)	$	25,434

Amortization expense associated with intangible assets for the three months ended ~~June~~September 30, 2021 and 2020, totaled $1.6 million and $3.3 million, respectively, and ~~$3.2~~$4.8 million and ~~$6.7~~$10.0 million for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, respectively.

The following table provides the annual intangible amortization expense currently expected to be recognized for the years 2021 through 2025:


(in thousands)	(in thousands)	Remainder of 2021		2022		2023		2024		2025		(in thousands)	Remainder of 2021		2022		2023		2024		2025
Amortization expense	Amortization expense	$	3,233	$	6,466	$	5,841	$	3,785	$	2,876	Amortization expense	$	1,616	$	6,466	$	5,841	$	3,785	$	2,876

Note 5. Fair Value of Financial Instruments

The Company applies ASC Topic 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 — Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities listed on active market exchanges.

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 liabilities measured at fair value on a recurring basis:


		June 30, 2021								December 31, 2020									September 30, 2021								December 31, 2020
(in thousands)	(in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total		(in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Liabilities	Liabilities																	Liabilities
Private warrants	Private warrants	$	0	$	634	$	0	$	634	$	0	$	0	$	0	$	0	Private warrants	$	—	$	348	$	—	$	348	$	—	$	—	$	—	$	—
Series B Preferred Stock - Anti-dilution warrants	Series B Preferred Stock - Anti-dilution warrants	0		0		8,200		8,200		0		0		8,800		8,800		Series B Preferred Stock - Anti-dilution warrants	—		—		18,500		18,500		—		—		8,800		8,800
Series B-1 Preferred Stock - Performance warrants	Series B-1 Preferred Stock - Performance warrants	0		0		0		0		0		0		400		400		Series B-1 Preferred Stock - Performance warrants	—		—		—		—		—		—		400		400

Total liabilities	Total liabilities	$	0	$	634	$	8,200	$	8,834	$	0	$	0	$	9,200	$	9,200	Total liabilities	$	—	$	348	$	18,500	$	18,848	$	—	$	—	$	9,200	$	9,200

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


(in thousands)	(in thousands)	Series B Preferred Stock - Anti-dilution warrants		Series B-1 Preferred Stock - Performance warrants		(in thousands)	Series B Preferred Stock - Anti-dilution warrants		Series B-1 Preferred Stock - Performance warrants
Beginning Balance, December 31, 2020	Beginning Balance, December 31, 2020	$	8,800	$	400	Beginning Balance, December 31, 2020	$	8,800	$	400
Fair value adjustment - loss (gain) recognized in other income	Fair value adjustment - loss (gain) recognized in other income	(600)		(400)		Fair value adjustment - loss (gain) recognized in other income	17,268		(400)

Ending Balance, June 30, 2021		$	8,200	$	0
Transfer to non-recurring fair value instrument (equity)						Transfer to non-recurring fair value instrument (equity)	(7,568)		—
Ending Balance, September 30, 2021						Ending Balance, September 30, 2021	$	18,500	$	—

~~In 2019,~~On August 2, 2021, the Company ~~entered into three equity purchase agreements and issued Series B Preferred Stock as discussed in~~ ~~Note 6. Debt and Series B Preferred Stock. The agreements require that on~~closed an underwritten public offering. At the ~~conversion of any~~closing of the ~~Convertible~~offering, the following equity transactions were completed with ASOF Holdings I, L.P. (“ASOF”) and Ares Special Situations Fund IV, L.P. (“ASSF” and, together with ASOF, “Ares Parties”):

•the Ares Parties converted all of their Series A Preferred Stock, ~~to common shares, the Series B Preferred Stock will receive additional warrants (Anti-dilution Warrants) to purchase common shares at a price of~~par value $0.0001 per ~~share. The agreements also require that if~~ share (the “Series A Preferred Stock”) (consisting of all of the Company's issued and outstanding shares of Series A Preferred Stock), into 2,132,273 shares of common stock;

•the Company ~~fails~~issued to ~~meet a certain Adjusted EBITDA (as~~the Ares Parties 507,417 shares of common stock representing shares of common stock underlying warrants that ~~term is defined in~~ the ~~agreements) threshold on a trailing twelve-month basis from May 31, 2020 through April 30, 2021, the Series B Preferred Stock will receive additional warrants (Performance Warrants)~~Ares Parties were entitled to ~~purchase common shares at $0.0001 per share. On May 20, 2019, the~~pursuant to anti-dilution rights that are triggered upon conversion ~~rights for~~of the Series A Preferred Stock ~~were amended to allow~~described below as a part of the ~~holders of~~ “Series AB Preferred Stock ~~to convert all or any portion~~- Anti-Dilution Warrants” section;

For further discussion of ~~Series A Preferred Stock outstanding into common stock at any point in time.~~the equity transaction see Note 8. Earnings Per Share.

The information below describes the balance sheet classification and the recurring fair value measurement for these requirements:

Private Warrants (recurring) - The Company has 295,000 private warrants that are not actively traded on the public markets and the Company adjusts the fair value at the end of each fiscal period using the price on that date multiplied by the remaining private warrants. The Private warrants were recorded as ~~Warrant~~warrant obligations at the end of the quarter and the fair value adjustment was recorded as ~~other expense~~Warrant liability fair value adjustment for the three and ~~six~~nine months ended ~~June~~September 30, 2021. For further discussion see Note 8. Earnings Per Share.

Series B Preferred Stock - Anti-dilution Warrants (recurring) - The number of common shares attributable to the warrants issued to Series B Preferred Stockholders for anti-dilution warrants were as follows;

•upon conversion by Series A Preferred Stockholders isand determined on a 30-day volume weighted average. ~~The Anti-dilution warrant~~As noted above, these anti-dilution warrants were issued upon the conversion of the Series A Preferred Stock as part of the equity transaction on August 2, 2021 and therefore no liability was ~~valued~~recorded at September 30, 2021.

•upon the exercise of any warrant with an exercise price of $11.50 or higher. As of September 30, 2021, the Company had 8,480,000 Merger Warrants to purchase shares of common stock at $11.50 per share. If the Merger Warrants were converted it would result in an additional 2.6 million anti-dilution warrants being issued. As of September 30, 2021, the Company recorded the anti-dilution warrants at fair value, which was estimated using ~~the~~a Monte Carlo simulation based on certain significant unobservable inputs, such as a risk rate premium, volatility of stock, conversion stock price, ~~at the end~~current stock price and amount of time remaining before expiration of the ~~quarter and was recorded~~Merger Warrants. The calculation derived a fair value adjustment of $18.5 million to the liability based on an anti-dilution warrant fair value of $7.27.

Significant unobservable inputs used in the fair value calculation as ~~a liability.~~of the periods indicated were as follows:


	September 30, 2021
Stock price	$	11.43
Conversion stock price	$	11.50
Time before Merger Warrant expiration	1.49
Stock volatility	56.95		%
Risk-free interest rate	0.18		%

Series B-1 Preferred Stock - Performance Warrants (recurring) - The warrant liability was recorded at fair value as a liability, 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. ~~As of June 30, 2021, the~~The Company remained above the Adjusted EBITDA threshold for the trailing twelve-month basis from May 31, 2020 through April 30, 2021 and therefore was not required to issue additional warrants.

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 and Series B Preferred Stock

Debt consisted of the following obligations as of:


(in thousands)	(in thousands)	June 30, 2021		December 31, 2020		(in thousands)	September 30, 2021		December 31, 2020

Term loan	Term loan	$	173,345	$	173,345	Term loan	$	—	$	173,345

Senior unsecured notes						Senior unsecured notes	300,000		—
Commercial equipment notes	Commercial equipment notes	4,268		5,582		Commercial equipment notes	4,170		5,582
Total principal due for long-term debt	Total principal due for long-term debt	177,613		178,927		Total principal due for long-term debt	304,170		178,927
Unamortized debt discount and issuance costs	Unamortized debt discount and issuance costs	(14,070)		(17,196)		Unamortized debt discount and issuance costs	(11,231)		(17,196)
Less: Current portion of long-term debt	Less: Current portion of long-term debt	(2,277)		(2,506)		Less: Current portion of long-term debt	(2,309)		(2,506)
Long-term debt, less current portion	Long-term debt, less current portion	$	161,266	$	159,225	Long-term debt, less current portion	$	290,630	$	159,225

Debt - Series B Preferred Stock	Debt - Series B Preferred Stock	$	186,696	$	185,396	Debt - Series B Preferred Stock	$	—	$	185,396
Unamortized debt discount and issuance costs	Unamortized debt discount and issuance costs	(10,140)		(11,528)		Unamortized debt discount and issuance costs	—		(11,528)
Long-term Series B Preferred Stock	Long-term Series B Preferred Stock	$	176,556	$	173,868	Long-term Series B Preferred Stock	$	—	$	173,868

Senior Unsecured Notes

On August 17, 2021, IEA Energy Services LLC, a wholly owned subsidiary of the Company (“Services”), issued $300.0 million aggregate principal amount of its 6.625% senior unsecured notes due 2029 (the “Senior Unsecured Notes”), in a private placement. Interest is payable on the Senior Unsecured Notes on each February 15 and August 15, commencing on February 15, 2022. The Senior Unsecured Notes will mature on August 15, 2029. The Senior Unsecured Notes are guaranteed on a senior unsecured basis by the Company and certain of its domestic wholly-owned subsidiaries (the “Guarantors”).

On or after August 15, 2024, the Senior Unsecured Notes are subject to redemption at any time and from time to time at the option of Services, in whole or in part, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest, if redeemed during the twelve-month period beginning on August 15 of the years indicated below:


Year	Percentage
2024	103.3	%
2025	101.7	%
2026 and thereafter	100.0	%

Prior to August 15, 2024, Services may also redeem some or all of the Senior Unsecured Notes at the principal amount of the Senior Unsecured Notes, plus a “make-whole premium,” together with accrued and unpaid interest. In addition, at any time prior to August 15, 2024, Services may redeem up to 40.0% of the original principal amount of the Senior Unsecured Notes with the proceeds of certain equity offerings at a redemption price of 106.63% of the principal amount of the Senior Unsecured Notes, together with accrued and unpaid interest.

In connection with the issuance of the Senior Unsecured Notes, Services entered into an indenture (the “Indenture”) with the Guarantors and Wilmington Trust, National Association, as trustee, providing for the issuance of the Senior Unsecured Notes. The terms of the Indenture provides for, among other things, negative covenants that under certain circumstances would limit Services’ ability to incur additional indebtedness; pay dividends or make other restricted payments; make loans and investments; incur liens; sell assets; enter into affiliate transactions; enter into certain sale and leaseback transactions; enter into agreements restricting Services' subsidiaries' ability to pay dividends; and merge, consolidate or amalgamate or sell all or

1314

substantially all of its property, subject to certain thresholds and exceptions. The ~~weighted average interest rate for the term loan as of June 30, 2021 and December 31, 2020, was 6.90% and 7.00%, respectively.~~

~~Debt Covenants~~

~~The term loan is governed by the terms of the Third A&R Credit Agreement, dated May 2019, which include customary affirmative and negative covenants and provide~~Indenture provides for customary events of default ~~including,~~that include (subject in certain cases to customary grace and cure periods), among others, nonpayment of principal or ~~interest and~~interest; breach of other covenants or agreements in the Indenture; failure to ~~timely deliver financial statements. Under~~pay certain other indebtedness; failure to pay certain final judgments; failure of certain guarantees to be enforceable; and certain events of bankruptcy or insolvency.

Credit Agreement

On August 17, 2021, Services, as the ~~Third A&R~~borrower, and certain guarantors (including the Company), entered into a Credit Agreement (the “Credit Agreement”) with a syndicate of lenders and CIBC Bank USA in its capacities as the ~~financial covenant~~Administrative and Collateral Agent for the lenders. The Credit Agreement provides for a $150.0 million senior secured revolving credit facility. The Credit Agreement is guaranteed by the Company and certain subsidiaries of the Company (the “Credit Agreement Guarantors” and together with Services, the “Loan Parties”) and is secured by a security interest in substantially all of the Loan Parties’ personal property and assets. Services has the ability to increase available borrowing under the credit facility by an additional amount up to $50.0 million subject to certain conditions.

Services may voluntarily repay and reborrow outstanding loans under the credit facility at any time subject to usual and customary breakage costs for borrowings bearing interest based on LIBOR and minimum amount requirements set forth in the Credit Agreement. The credit facility includes $100.0 million in borrowing capacity for the issuance of letters of credit. The credit facility is not subject to amortization and matures with all commitments terminating on August 17, 2026.

Interest rates on the credit facility are based upon (1) an index rate that is established at the highest of the prime rate or the sum of the federal funds rate plus 0.50%, or (2) at Services’ election, a LIBOR rate, plus in either case, an applicable interest rate margin. The applicable interest rate margins are adjusted on a quarterly basis based upon Services’ first lien net leverage within the range of 1.00% to 2.50% for index rate loans and 2.00% and 3.50% for LIBOR loans. Borrowings under the credit facility shall initially bear interest at a rate per annum equal to LIBOR plus 2.50%. In addition to paying interest on outstanding principal under the credit facility, Services is required to pay a commitment fee to the lenders under the credit facility for unused commitments. The commitment fee rate ranges from 0.30% to 0.45% per annum depending on Services’ First Lien Net Leverage Ratio (as defined in the Credit Agreement).

The credit facility requires Services to comply with a quarterly maximum consolidated First Lien Net Leverage Ratio test and minimum Fixed Charge Coverage ratio as follows:

•Fixed Charge Coverage Ratio - The Loan Parties shall not permit the Fixed Charge Coverage Ratio (as defined in the Credit Agreement) as of the last day of any four consecutive fiscal quarter period ending on the last day of a fiscal quarter to be less than 1.20:1.00, commencing with the period ending September 30, 2021.

•First Lien Net Leverage Ratio – The Loan Parties will not permit the First Lien Net Leverage Ratio (as defined ~~therein) may not~~in the Credit Agreement) as of the last day of any four consecutive fiscal quarter period ending on the last day of a fiscal quarter to exceed ~~2.75:1.0,~~1.75:1.00, commencing with the period ending September 30, 2021 (subject to certain increases for ~~the four fiscal quarters ending December 31, 2021, and for all subsequent quarters, 2.25:1.0.~~permitted acquisitions).

In addition, the Credit Agreement contains a number of covenants that, among other things and subject to certain exceptions, limit Services’ ability and the ability of its restricted subsidiaries including the Company to incur indebtedness or guarantee debt; incur liens; make investments, loans and acquisitions; merge, liquidate or dissolve; sell assets, including capital stock of subsidiaries; pay dividends on its capital stock or redeem, repurchase or retire its capital stock; amend, prepay, redeem or purchase subordinated debt; and engage in transactions with affiliates.

The Credit Agreement contains certain customary representations and warranties, affirmative covenants and events of default (including, among others, an event of default upon a change of control). If an event of default occurs, the lenders under the credit facility are entitled to take various actions, including the acceleration of amounts due under the credit facility and all actions permitted to be taken by a secured creditor.

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.Term Loan

~~Debt -~~ Prior to entering into the Credit Agreement, we were party to that certain Third A&R Credit Agreement, dated May 15, 2019, as amended (the “Third A&R Credit Agreement”), which governed the terms of our term loan (the “Term Loan”) and provided for revolving credit commitments of up to $75.0 million, upon the terms and subject to the satisfaction of the

conditions set forth in the Third A&R Credit Agreement. The Term Loan was repaid in full and the Third A&R Credit Agreement has been terminated.

The stated interest rate for the senior notes as of September 30, 2021 was 6.625%. The weighted average interest rate for the Third A&R Credit Agreement term loan as of December 31, 2020 was 7.00%.

Series B Preferred Stock

In 2019, the Company entered into three equity purchase agreements and issued Series B Preferred Stock. The Series B Preferred Stock iswas a mandatorily redeemable financial instrument under ASC Topic 480 and ~~has~~had been recorded as a liability using the effective interest rate method for each tranche. The mandatory redemption date for all tranches of the Series B Preferred Stock iswas February 15, 2025.

~~The~~On August 17, 2021, the Company redeemed all of the shares of Series B Preferred Stock ~~requires quarterly dividend payments calculated~~ at the Optional Redemption Price per share. The Optional Redemption Price was a ~~12% annual rate on all outstanding~~price per share of Series B Preferred Stock ~~when the Company’s First Lien Net Leverage Ratio (as defined~~ in ~~the Third A&R Credit Agreement) is less than or~~cash equal to ~~1.50:1.0~~$1,500, plus all accrued and ~~a 13.5% rate if~~unpaid dividends thereon since the ~~ratio is greater. The~~immediately preceding dividend date calculated through the day prior to such redemption, minus the amount of any Series B preferred cash dividends actually paid. See the table below for further discussion of proceeds and the loss on extinguishment.

Debt and Series B Preferred Stock ~~agreements allow~~Extinguishment

The Company used the ~~Company~~proceeds from the Senior debt and equity transaction discussed in Note 8. Earnings Per Share and the New Credit Facility discussed above to ~~accrue, but not pay,~~redeem all of the ~~dividends at a 15.0% annual rate. Accrued dividends increase the amount of~~ Series B Preferred ~~Stock. Accrued dividends were $18.3 million at June 30, 2021~~Stock and ~~December 31, 2020, respectively. Dividend payments are not deductible in calculating~~paid off the ~~Company’s federal and state income taxes.~~Term Loan. Below is a summary of the the use of proceeds:


Use of Proceeds ($ in millions)
Proceeds from Equity transaction	$	193.5
Proceeds from Debt transaction	300.0
Transaction proceeds	493.5
Less: Deferred Fees	(11.4)
Net transaction proceeds	$	482.1

Series B Preferred Stock redemption	$	(264.9)
Term Loan payoff	(173.3)
Revolver and letter of credit payoff	(22.4)
Total use of proceeds	$	(460.6)

Loss on Extinguishment of Debt
Series B Preferred Stock - Make Whole Premium	$	47.3
Write-off of deferred fees related to term loan	13.2
Series B Preferred Stock - write-off of deferred fees and discount	40.5
Loss on Extinguishment of Debt	$	101.0

Contractual Maturities

Contractual maturities of the Company's outstanding principal on debt obligations as of ~~June~~September 30, 2021:

(in thousands) Maturities
Remainder of 2021 $ 1,214
2022 16,916
2023 29,986
2024 129,368
2025 129
Thereafter 0
Total contractual maturities $ 177,613


(in thousands)	Maturities
Remainder of 2021	$	633
2022	1,952
2023	838
2024	442
2025	239
Thereafter	300,066
Total contractual maturities	$	304,170

Note 7. Commitments and 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 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 ASC 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 be exercised.

Lease term, discount rate, variable lease costs and future minimum lease payment determinations require the use of judgment as these are based on the facts and circumstances related to each specific lease. Lease terms are generally based on their initial non-cancelable terms, unless there is a 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 implicit rate in a lease agreement is used when it can be determined. Otherwise, the Company's incremental borrowing rate, which is based on information available as of the lease commencement date, including applicable lease terms and the current economic environment, is used to determine the value of the lease obligation.

Finance Leases

The Company has obligations, exclusive of associated interest, under various finance leases for equipment totaling ~~$52.2~~$52.8 million and $57.6 million at ~~June~~September 30, 2021 and December 31, 2020, respectively. Gross property under this capitalized lease agreement at ~~June~~September 30, 2021 and December 31, 2020, totaled ~~$135.4~~$144.9 million and $128.0 million, less accumulated depreciation of ~~$65.3~~$70.2 million and $55.1 million, respectively, for net balances of ~~$70.1~~$74.7 million and $72.9 million, respectively. Depreciation expense for assets held under the finance leases is included in cost of revenue in the condensed consolidated statements of operations.

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


(in thousands)	(in thousands)			(in thousands)
Remainder of 2021	Remainder of 2021	$	13,547	Remainder of 2021	$	6,846
2022	2022	23,379		2022	25,050
2023	2023	8,984		2023	11,125
2024	2024	5,043		2024	6,951
2025	2025	3,555		2025	4,870
Thereafter	Thereafter	811		Thereafter	1,721
Future minimum lease payments	Future minimum lease payments	55,319		Future minimum lease payments	56,563
Less: Amount representing interest	Less: Amount representing interest	(3,107)		Less: Amount representing interest	(3,713)
Present value of minimum lease payments	Present value of minimum lease payments	52,212		Present value of minimum lease payments	52,850
Less: Current portion of finance lease obligations	Less: Current portion of finance lease obligations	24,842		Less: Current portion of finance lease obligations	24,724
Finance lease obligations, less current portion	Finance lease obligations, less current portion	$	27,370	Finance lease obligations, less current portion	$	28,126

Operating Leases

In the ordinary course of business, the Company enters into non-cancelable operating leases for certain of its facilities, vehicles and equipment. The Company has obligations, exclusive of associated interest, totaling ~~$39.2~~$38.5 million and $38.0 million at ~~June~~September 30, 2021 and December 31, 2020, respectively. Property under these operating lease agreements at ~~June~~September 30, 2021 and December 31, 2020, totaled ~~$37.7~~$37.0 million and $36.5 million, respectively.

The Company has long-term power-by-the-hour equipment rental agreements 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 are listed in the following table as variable lease costs.

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

(in thousands)
Remainder of 2021 $ 6,229
2022 11,238
2023 8,776
2024 4,740
2025 2,236
Thereafter 18,936
Future minimum lease payments 52,155
Less: Amount representing interest (12,983)
Present value of minimum lease payments 39,172
Less: Current portion of operating lease obligations 9,817
Operating lease obligations, less current portion $ 29,355


(in thousands)
Remainder of 2021	$	3,247
2022	11,983
2023	9,476
2024	5,058
2025	2,285
Thereafter	18,960
Future minimum lease payments	51,009
Less: Amount representing interest	(12,481)
Present value of minimum lease payments	38,528
Less: Current portion of operating lease obligations	10,196
Operating lease obligations, less current portion	$	28,332

Lease Information


		Three months ended				Six Months Ended							Three months ended				Nine Months Ended
		June 30, 2021		June 30, 2020		June 30, 2021			June 30, 2020				September 30, 2021		September 30, 2020		September 30, 2021			September 30, 2020

Finance Lease cost:	Finance Lease cost:											Finance Lease cost:
Amortization of right-of-use assets	Amortization of right-of-use assets	$	5,843	$	5,858	$	11,678		$	11,555		Amortization of right-of-use assets	$	5,855	$	5,281	$	17,533		$	16,836
Interest on lease liabilities	Interest on lease liabilities	789		940		1,606			2,126			Interest on lease liabilities	758		891		2,364			3,017
Operating lease cost	Operating lease cost	3,179		3,490		6,573			6,967			Operating lease cost	3,186		3,340		9,759			10,307
Short-term lease cost	Short-term lease cost	35,624		45,134		59,228			66,768			Short-term lease cost	61,222		49,817		120,450			116,585
Variable lease cost	Variable lease cost	2,910		985		4,157			1,944			Variable lease cost	2,214		891		6,372			2,835
Sublease Income	Sublease Income	(33)		(33)		(66)			(66)			Sublease Income	(33)		(33)		(100)			(99)
Total lease cost	Total lease cost	$	48,312	$	56,374	$	83,176		$	89,294		Total lease cost	$	73,202	$	60,187	$	156,378		$	149,481

Other information:	Other information:											Other information:

Cash paid for amounts included in the measurement of lease liabilities:	Cash paid for amounts included in the measurement of lease liabilities:											Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	Operating cash flows from finance leases	$	789	$	940	$	1,606		$	2,126		Operating cash flows from finance leases	$	758	$	891	$	2,363		$	3,017
Operating cash flows from operating leases	Operating cash flows from operating leases	$	3,179	$	3,385	$	6,424		$	6,728		Operating cash flows from operating leases	$	3,232	$	3,275	$	9,656		$	10,003

Weighted-average remaining lease term - finance leases	Weighted-average remaining lease term - finance leases					2.66 years			2.70 years			Weighted-average remaining lease term - finance leases					2.84 years			2.55 years
Weighted-average remaining lease term - operating leases	Weighted-average remaining lease term - operating leases					7.71 years			7.86 years			Weighted-average remaining lease term - operating leases					7.55 years			8.16 years
Weighted-average discount rate - finance leases	Weighted-average discount rate - finance leases					5.85		%	6.27		%	Weighted-average discount rate - finance leases					5.49		%	6.07		%
Weighted-average discount rate - operating leases	Weighted-average discount rate - operating leases					6.81		%	6.96		%	Weighted-average discount rate - operating leases					6.75		%	6.94		%

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 ~~June~~September 30, 2021, and December 31, 2020, the Company was contingently liable under letters of credit issued under ~~its Third A&R Credit Agreement,~~our credit facility, in the amount of ~~$21.7~~$33.7 million and $7.8 million, respectively, related to projects and insurance. In addition, as of ~~June~~September 30, 2021 and December 31, 2020, the Company had outstanding surety bonds on projects with nominal amounts of ~~$3.0~~$3.2 billion and $2.8 billion, respectively. The remaining approximate exposure related to these surety bonds amounted to $400.0 million and $293.1 million, respectively.

Legal Proceedings

The Company is a nominal defendant to a lawsuit, instituted in December 2019 in the Delaware Chancery Court by a purported stockholder of the Company, against the Company’s Board of Directors, Oaktree Capital Management ("Oaktree"), and Ares Management, LLC ("Ares"), from which Ares was subsequently dismissed. The complaint asserts a variety of claims arising out of the sale of Series B Preferred Stock and warrants to Ares and Oaktree in May 2019. The complaint alleges claims for breach of fiduciary duty directly on behalf of putative class of stockholders and derivatively on behalf of the Company, aiding and abetting breach of fiduciary duty both derivatively and directly, and unjust enrichment derivatively on behalf of the Company. The plaintiff is seeking rescission of the transaction, unspecified monetary damages, and fees. On July 28, 2021, the Company and the plaintiff stockholder entered into a memorandum of understanding to settle the lawsuit against all defendants, subject to approval by the Delaware Chancery Court, the terms of which do not require payment of any settlement funds to the plaintiff except that, as they are entitled to do under Delaware law, the plaintiffs are entitled to ask the Court to award them attorneys’ fees in connection with the settlement. The timing of the approval of the settlement, if any, by the Court is unknown at this time but is not expected to occur prior to year-end. The Company has placed its director and officer liability insurance carriers on notice of the ~~lawsuit;~~lawsuit and the proposed settlement; pursuant to the coverage terms, the Company is subject to a $1.5 million deductible, which the Company has ~~not yet exhausted, but we expect will be spent in defense of the lawsuit.~~exhausted. Pursuant to agreements entered into in connection with the sale of Series B Preferred Stock, the Company is obligated to indemnify Oaktree and Ares for any legal fees and damages incurred by either of them in connection with this matter.

The Company is involved in a variety of other legal cases, claims and other disputes that arise from time to time in the ordinary course of its business. While the Company believes it has good defense against these cases and intends to defend them vigorously, it cannot provide assurance that it will be successful in recovering all or any of the potential damages it has claimed or in defending claims against the Company. While the lawsuits and claims are asserted for amounts that may be material, should an unfavorable outcome occur, management does not currently expect that any currently pending matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, an unfavorable resolution of one or more of such matters could have a material adverse effect on the Company's business, financial condition, results of operations and cash flows.

Note 8. Earnings Per Share

The Company calculates earnings (loss) per share (“EPS”) in accordance with ASC Topic 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 and net income allocated to participating securities. If there is a net loss, the amount of the loss is increased by those preferred dividends.

Diluted EPS, where applicable, assumes the dilutive effect of (i) Series A cumulative convertible preferred stock, using the if-converted method, (ii) publicly traded warrants, (iii) Series B Preferred Stock - Warrants and (iv) the assumed exercise of in-the-money stock options 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.

Public Offering

On August 2, 2021, the Company closed an underwritten public offering of 10,547,866 shares of common stock, par value $0.0001 per share (the “Common Stock”), at a public offering price of $11.00 per share and pre-funded warrants (the “Pre-Funded Warrants”) to purchase an additional 7,747,589 shares of Common Stock at a price of $10.9999 per Pre-Funded Warrant (the “Offering”).

The Pre-Funded Warrants to purchase 7,747,589 shares of our Common Stock were issued to ASOF in connection with the closing of the Offering. The Pre-Funded Warrants have an exercise price of $0.0001 per share and do not expire and are exercisable at any time after their original issuance. The Pre-Funded Warrants may not be exercised by the holder to the extent that the holder, together with its affiliates that report together as a group under the beneficial ownership rules, would beneficially own, after such exercise more than 32.0% of our issued and outstanding Common Stock.

At the closing of the Offering the Ares Parties completed the following equity transactions:

•converted all of their Series A Preferred Stock into 2,132,273 shares of Common Stock;

•the Company issued to the Ares Parties 507,417 shares of Common Stock representing shares of Common Stock underlying warrants that the Ares Parties were entitled to pursuant to anti-dilution rights that are triggered upon conversion of the Series A Preferred Stock described in Note 5. Fair value of financial instruments; and

•the Company issued to the Ares Parties 5,996,310 shares of Common Stock for the exercise of warrants that were issued to the Ares Parties in connection with their original purchases of Series B Preferred Stock (the “Series B Preferred Stock - Warrants”).

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


		Three Months Ended				Six Months Ended			Three Months Ended				Nine Months Ended
		June 30,				June 30,			September 30,				September 30,
($ in thousands, except per share data)	($ in thousands, except per share data)	2021		2020		2021	2020	($ in thousands, except per share data)	2021		2020		2021	2020
Numerator:	Numerator:							Numerator:
Net income (loss)	Net income (loss)	$	4,699	$	3,597	(15,735)	(9,146)	Net income (loss)	$	(99,649)	$	11,266	(115,384)	2,120
Less: Convertible Preferred Stock dividends	Less: Convertible Preferred Stock dividends	(676)		(606)		(1,332)	(1,372)	Less: Convertible Preferred Stock dividends	(255)		(619)		(1,587)	(1,991)

Less: Net income allocated to participating securities	Less: Net income allocated to participating securities	(788)		(802)		0	0	Less: Net income allocated to participating securities	—		(2,854)		—	(35)
Net income (loss) available to common stockholders	Net income (loss) available to common stockholders	3,235		2,189		(17,067)	(10,518)	Net income (loss) available to common stockholders	(99,904)		7,793		(116,971)	94

Denominator:	Denominator:							Denominator:
Weighted average common shares outstanding - basic	Weighted average common shares outstanding - basic	24,471,286		20,751,673		23,768,413	20,636,944	Weighted average common shares outstanding - basic	38,038,055		20,968,271		28,577,230	20,748,193

Series B Preferred Stock - Warrants~~(2)~~(3)	Series B Preferred Stock - Warrants~~(2)~~(3)	6,649,026		7,683,716		0	0	Series B Preferred Stock - Warrants~~(2)~~(3)	—		7,683,903		—	—
Convertible Series A Preferred Stock	Convertible Series A Preferred Stock	0		9,448,988		0	0	Convertible Series A Preferred Stock	—		4,758,887		—	—
Merger Warrants~~(1)~~	Merger Warrants~~(1)~~	696,434		0		0	0	Merger Warrants~~(1)~~	—		—		—	—
Options	Options	61,740		0		0	0	Options	—		—		—	—
RSUs(4)	RSUs(4)	1,560,817		2,094,005		0	0	RSUs(4)	—		1,925,003		—	—
Weighted average common shares outstanding - diluted	Weighted average common shares outstanding - diluted	33,439,303		39,978,382		23,768,413	20,636,944	Weighted average common shares outstanding - diluted	38,038,055		35,336,064		28,577,230	20,748,193

Anti-dilutive:	Anti-dilutive:							Anti-dilutive:
Convertible Series A Preferred Stock(1)	Convertible Series A Preferred Stock(1)	2,090,443		0		1,859,350	8,001,014	Convertible Series A Preferred Stock(1)	—		—		—	6,920,305
Merger Warrants ~~(1)~~(2)	Merger Warrants ~~(1)~~(2)	0		0		696,434	0	Merger Warrants ~~(1)~~(2)	536,719		—		1,435,878	—
Series B Preferred Stock - Warrants ~~(2)~~(3)	Series B Preferred Stock - Warrants ~~(2)~~(3)	0		0		6,131,520	7,679,520	Series B Preferred Stock - Warrants ~~(2)~~(3)	135,259		—		135,259	7,680,981
Options (3)		0		0		112,355	0
RSUs (4)		0		0		1,759,431	1,775,182
Pre-Funded Warrants(4)								Pre-Funded Warrants(4)	7,747,589		—		7,747,589	—
Options (5)								Options (5)	59,284		—		94,665	—
RSUs (6)								RSUs (6)	1,667,430		—		1,728,764	1,825,123

Basic EPS	Basic EPS	0.13		0.11		(0.72)	(0.51)	Basic EPS	(2.63)		0.37		(4.09)	—
Diluted EPS (5)		0.12		0.09		(0.72)	(0.51)
Diluted EPS								Diluted EPS	(2.63)		0.32		(4.09)	—

(1) ~~As of June~~On August 2, 2021 the Series A Preferred Stock was converted into common shares and therefore has been excluded from the anti-dilutive section above for the three and nine months ended September 30, 2021.

(2) For the three months and nine months ended September 30, 2020, Merger 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 not greater than the average market price of the common stock during the period. ~~These~~For the three and nine months ended September 30, 2021, these warrants were calculated using the treasury stock method and were ~~dilutive for the three months ended June 30, 2021 and anti-dilutive for the six months ended June 30, 2021.~~anti-dilutive.

~~(2)~~(3) Series B Preferred Stock - Warrants are considered as participating securities because the holders are entitled to participate in any distributions similar to that of common shareholders. On August 2, 2021, the Company issued to the Ares Parties 5,996,310 shares of Common Stock for the exercise of warrants that were issued to the Ares Parties in connection with their original purchases of Series B Preferred Stock. As of the three and nine month ended September 30, 2021, there were 135,259 Series B Preferred Stock - Warrants that were considered anti-dilutive.

(4) On August 2, 2021 the Company issued 7,747,589 Pre-Funded Warrants to ASOF that are considered participating because the holders are entitled to participate in any distributions similar to that of common shareholders.

~~(3)~~

(5) As of ~~June~~September 30, 2020, there were ~~539,034~~504,214 of vested and unvested options 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.

~~(4)~~(6) As of ~~June~~September 30, 2021 and 2020, ~~132,108~~116,867 and ~~513,153~~611,166 unvested RSUs, respectively. These awards were not considered dilutive as the respective performance targets were not achieved.

~~(5) For purposes of calculating diluted earnings per shares the numerator was calculated as net income (loss) less preferred dividends for the three months ended June 30, 2021 and 2020.~~

Merger Warrants

On August 4, 2015, M III formed a Special Purpose Acquisition Corporation and issued public and private warrants before the Merger with the Company. As of ~~June~~September 30, 2021, the Company had 16,925,160 Merger Warrants outstanding, of which 295,000 are considered private warrants. Two Merger Warrants will be exercisable for one share of our common stock at $11.50 per share until the expiration on March 26, 2023. For further discussion about the valuation of the private warrants see Note 5. Fair Value of Financial Instruments.

Series B Preferred Stock Anti-dilution Warrants

The Company also had ~~the following~~ potential outstanding warrants related to the Series B Preferred Stock issuance.

•~~At June 30, 2021, a total of 636,221 warrants calculated on an if-converted method for the conversion of shares related to the outstanding Series A Preferred Stock. As discussed in~~ ~~Note 5. Fair Value of Financial Instruments~~, these warrants are recorded as a liability. These warrants are not included in the weighted average share calculation as the contingent event (conversion of Series A Preferred Stock) had not occurred at the end of the quarter.

•~~The second set of additional~~ Additional warrants would be issued if the exercise of any warrant with an exercise price of $11.50 or higher.

• See The final set of additional warrants would be issued if 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.

~~Series A Preferred Stock~~

~~As of June 30, 2021, we had 17,483 shares of Series A Preferred Stock with a stated~~Note 5. Fair 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.

~~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~~financial instruments for further ~~action by the Board at 12% per annum.~~

discussion
.

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 June 30, 2021, the Company has accrued a cumulative of $5.7 million in dividends to the holder of Series A Preferred Stock as a reduction to additional paid-in capital.~~

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 an 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 ~~June~~September 30, 2021 and 2020, we recognized ~~$1.9~~$1.5 million and ~~$0.8~~$1.1 million in compensation expense, respectively, and ~~$2.7~~$4.2 million and ~~$2.0~~$3.1 million for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, respectively.

Note 9. Income Taxes

The Company’s statutory federal tax rate was 21.00% for the periods ended ~~June~~September 30, 2021 and 2020, respectively. State tax rates for the same period vary among states and range from approximately 0.8% to ~~12.0%~~11.5%. A small number of states do not impose an income tax.

The effective tax rates for the three months ended ~~June~~September 30, 2021 and 2020 were ~~47.0%~~(2.3)% and ~~56.8%~~35.3%, respectively, and were ~~(12.7)~~(3.6)% and ~~(73.4)%~~82.5% for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, respectively. The difference between the Company’s effective tax rate and the federal statutory rate primarily results from permanent differences related to the interest and other expenses accrued for the Series B Preferred Stock and executive compensation, which is not deductible for federal and state income taxes. There were 0no changes in uncertain tax positions during the periods ended ~~June~~September 30, 2021 and 2020.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted by the US Government in response to the COVID-19 pandemic to provide employment retention incentives. We do not believe that these relief measures materially affected the consolidated financial statements for the year ended December 31, 2020.

The Company has also made use of the payroll deferral provision to defer social security tax of approximately $13.6 million through December 31, 2020. Half of this amount is required to be paid on December 31, 2021 and the other half by December 31, 2022.

Note 10. Segments

We operate our business as two reportable segments: the Renewables segment and the Specialty Civil segment. Each of our reportable segments is comprised of similar business units that specialize in services unique to their respective markets. 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 services for the power delivery, solar, wind and battery storage markets that includes design, procurement, construction, restoration, and maintenance.

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 road and bridge construction, specialty paving, sports field development, industrial maintenance, outsourced contract mining and heavy hauling.

•Environmental remediation services such as site development, environmental site closure, and coal ash management.

•Rail infrastructure services such as planning, design, procurement, construction and maintenance of major railway and intermodal facilities.

Segment Revenue

Revenue by segment was as follows:

Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2021 2020 2021 2020
Segment Revenue % of Total Revenue Revenue % of Total Revenue Revenue % of Total Revenue Revenue % of Total Revenue
Renewables $ 424,854 75.8 % $ 324,262 67.5 % $ 605,228 72.3 % $ 573,008 68.3 %
Specialty Civil 135,294 24.2 % 156,342 32.5 % 231,332 27.7 % 265,759 31.7 %
Total revenue $ 560,148 100.0 % $ 480,604 100.0 % $ 836,560 100.0 % $ 838,767 100.0 %


	Three Months Ended September 30,								Nine Months Ended September 30,
(in thousands)	2021				2020				2021				2020
Segment	Revenue		% of Total Revenue		Revenue		% of Total Revenue		Revenue		% of Total Revenue		Revenue		% of Total Revenue
Renewables	$	517,172	74.1	%	$	327,051	62.6	%	$	1,122,400	73.2	%	$	900,059	66.1	%
Specialty Civil	180,587		25.9	%	195,181		37.4	%	411,919		26.8	%	460,940		33.9	%

Total revenue	$	697,759	100.0	%	$	522,232	100.0	%	$	1,534,319	100.0	%	$	1,360,999	100.0	%

Segment Gross Profit

Gross profit by segment was as follows:


		Three Months Ended June 30,								Six Months Ended June 30,									Three Months Ended September 30,								Nine Months Ended September 30,
(in thousands)	(in thousands)	2021				2020				2021				2020				(in thousands)	2021				2020				2021				2020
Segment	Segment	Gross Profit		Gross Profit Margin		Gross Profit		Gross Profit Margin		Gross Profit		Gross Profit Margin		Gross Profit		Gross Profit Margin		Segment	Gross Profit		Gross Profit Margin		Gross Profit		Gross Profit Margin		Gross Profit		Gross Profit Margin		Gross Profit		Gross Profit Margin
Renewables	Renewables	$	42,883	10.1	%	$	36,983	11.4	%	$	55,063	9.1	%	$	62,812	11.0	%	Renewables	$	51,867	10.0	%	$	37,371	11.4	%	$	106,930	9.5	%	$	100,183	11.1	%
Specialty Civil	Specialty Civil	10,600		7.8	%	17,258		11.0	%	14,961		6.5	%	24,470		9.2	%	Specialty Civil	20,303		11.2	%	21,518		11.0	%	35,264		8.6	%	45,988		10.0	%
Total gross profit	Total gross profit	$	53,483	9.5	%	$	54,241	11.3	%	$	70,024	8.4	%	$	87,282	10.4	%	Total gross profit	$	72,170	10.3	%	$	58,889	11.3	%	$	142,194	9.3	%	$	146,171	10.7	%

Note 11. Joint Ventures

As of ~~June~~September 30, 2021, the Company did not have any VIEs but did have one joint venture that used the proportionate consolidation method at 25% ownership. The following balances were included in the condensed consolidated financial statements:


(in thousands)	(in thousands)			June 30, 2021				(in thousands)			September 30, 2021
Assets	Assets							Assets
Cash	Cash			$	6,918			Cash			$	7,939
Accounts receivable	Accounts receivable			3,550				Accounts receivable			847
Contract assets	Contract assets			2,064				Contract assets			2,412

Liabilities	Liabilities							Liabilities
Accounts payable	Accounts payable			$	3,782			Accounts payable			$	2,569
Contract liabilities	Contract liabilities			8,750				Contract liabilities			6,394

		Three Months Ended		Six Months Ended		Three Months Ended	Nine Months Ended
		June 30, 2021				September 30, 2021
Revenue	Revenue	$	5,089	$	9,590			Revenue	$	5,835	$	15,425
Cost of revenue	Cost of revenue	5,089		9,590				Cost of revenue	3,599		13,189
Selling, general and administrative expenses	Selling, general and administrative expenses	450		450				Selling, general and administrative expenses	(450)		—

2124

Note 12. Related Party Transactions

On ~~February 9,~~August 2, 2021, Ares Management, LLC, on behalf of its affiliated funds, investment vehicles and/or managed accounts (“Ares”) purchased the outstanding Series B Preferred Stock and Series A Preferred Stock from funds managed by Oaktree Capital Management (“Oaktree”). As of June 30, 2021, Ares currently holds allas part of the ~~outstanding Series B Preferred Stock, except for 350 shares, and all of~~equity transactions the ~~outstanding Series A Preferred Stock.~~Company entered into the Stockholders’ Agreement with the Ares Parties. Pursuant to the Stockholders’ Agreement:

~~Related Party Shareholders~~


~~Type of Equity~~•The Ares Parties are entitled to designate 2 members of our Board for so long as the Ares Parties and their affiliates beneficially own less than 20% but more than or equal to 10% of our Common Stock, and no representatives if the Ares Parties and their affiliates beneficially own less than 10% of our Common Stock. The Stockholders’ Agreement also requires us to take any and all necessary action to reduce the number of directors on the Board to 9 and to cause the Board to be comprised of a total of 9 directorships (in each case, including (or assuming) both of the Ares representatives are members of the Board) immediately following the first annual or special meeting at which directors are elected following the closing of the Offering.	~~Holder~~	~~Ownership Percentage~~
~~Series A Preferred Stock and Series A Conversion Warrants~~	~~Ares~~	~~100~~	%
~~Series B-1 Preferred Stock, Performance Warrants, Warrants at Closing (initial amount issued)~~	~~Ares~~	~~100~~	%

~~Series B-2 and B-3 Preferred Stock, Warrants at Closing~~	~~Ares~~	~~100~~	%

•The Ares Parties agreed not to transfer any equity securities acquired in the Offering (including Common Stock, Pre-Funded Warrants and shares of Common Stock issuable upon exercise of the Pre-Funded Warrants) until twelve months following the initial closing of the Offering; provided, however, that certain transfers in connections with consolidations and reorganizations, tender or exchange offers, exercises of registration rights and certain distributions are permitted.

•The Ares Parties agreed, with respect to themselves and their controlled affiliates acting on their behalf, for a period of time up to the earlier of the 30-month anniversary of the date of closing of the Offering, or the earlier occurrence of the date in which the Ares Parties and their affiliates beneficially own less than 10% of our outstanding Common Stock, a change of control transaction, a material breach of the Stockholders’ Agreement by us, an event of default by us with respect to the our senior notes or credit agreements or other indebtedness exceeding $50.0 million, or any winding up, dissolution or liquidation or bankruptcy (subject to certain permitted exceptions):

◦not to transfer its Common Stock to competitors (as defined in the Stockholders’ Agreement) or any person that would beneficially own more than 20% of our Common Stock, subject to certain permitted exceptions;

◦not to take, or permit their controlled affiliates acting on their behalf to take, certain actions, subject to certain permitted exceptions, including, but not limited to:

◦making any public announcement, proposal or offer, with respect to (a) acquisitions of additional Common Stock, (b) any restructuring, recapitalization, liquidation or similar transaction, (c) the election of directors other than the Ares Parties’ designees or (d) changes to the Board and calling of special meetings;

◦publicly seek a change in the composition or size of the Board;

◦deposit any voting securities into a voting trust;

◦acquire any voting securities or beneficial ownership thereof greater than the Ares Parties’ beneficial ownership following closing of the Offering and 37.8% of the Common Stock on an Adjusted Outstanding Basis (as defined therein);

◦call for, or initiate, propose or requisition a call for any general or special meeting;

◦publicly state an intention, plan or arrangement to do any of the foregoing; or

◦intentionally and knowingly instigate, facilitate, encourage or assist any third party to do any of the foregoing; and

•to cause all voting securities to be present at any annual or special meeting in which directors are to be elected, to vote such securities either as recommended by the Board, or in the same proportions as votes cast by other voting securities with respect to director nominees or other nominees and in favor of any director

nominee of the Ares Parties, not to vote in favor of a change of control transaction pursuant to which the Ares Parties would receive consideration that is different in amount or form from other stockholders unless approved by the Board; and

•the Ares Parties are afforded reasonable access to our books and records for so long as the Ares Parties have a right to designate a director to the Board.

Note 13. Subsequent Events

On October 3, 2021, ASOF exchanged 3,420,267 non-voting Pre-Funded Warrants for 3,420,236 shares of the Company's Common Stock in a cashless exercise. ASOF may not exercise the balance of the pre-funded warrants if it would cause them to exceed a 32% ownership percentage.

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 the COVID-19 pandemic, 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. Factors that could cause actual results to differ include:

•potential risks and uncertainties relating to COVID-19, including the geographic spread, the severity of the disease, the scope and 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 potential negative impacts of COVID-19 on permitting and project construction cycles, the U.S. 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;

•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 equipment, fuel, 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, 2020 (“Annual Report”, and in our quarterly reports, other public filings and press releases.

2327

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.

Overview

We are a leading diversified infrastructure construction company with specialized energy and heavy civil expertise throughout the United States. We specialize in providing complete engineering, procurement and construction services throughout the United States for the renewable energy, traditional power and civil infrastructure industries. These services include the design, site development, construction, installation and restoration of infrastructure. We have completed more than 240 wind and solar projects in 40 states and construct one of every five gigawatts put in to place throughout the U.S. in any given year. Although the Company has historically focused on the renewable industry, but ~~has recently focused~~its recent focus on further expansion into the solar market and ~~with our recent~~ acquisitions ~~have expanded~~expanding its construction capabilities and geographic footprint in the areas of environmental remediation, industrial maintenance, specialty paving, heavy civil and rail infrastructure construction, ~~creating~~has created a diverse national platform of specialty construction capabilities. We believe we have the ability to continue to expand these services because we are well-positioned to leverage our expertise and relationships in the wind energy business to provide complete infrastructure solutions in all areas.

We have two reportable segments: the Renewables (“Renewables”) segment and the Heavy Civil and Industrial (“Specialty Civil”) segment. See Segment Results for a description of the reportable segments and their operations.

~~Coronavirus Pandemic Update~~Recent Developments

Public Equity Offering

As previously disclosed, on August 2, 2021, the Company closed an underwritten public offering of 10,547,866 shares of common stock, par value $0.0001 per share (the “Common Stock”) at a public offering price of $11.00 per share and pre-funded warrants (the “Pre-Funded Warrants”) to purchase an additional 7,747,589 shares of Common Stock at a price of $10.9999 per Pre-Funded Warrant, resulting in gross proceeds to us of approximately $193.5 million.

Senior Notes Offering

~~The COVID-19 pandemic continues to significantly impact the United States and the world. Since the start~~As previously disclosed, on August 17, 2021, IEA Energy Services LLC, a wholly owned subsidiary of the ~~COVID-19 pandemic, we have been focused on~~Company (“Services”), issued $300.0 million aggregate principal amount of its 6.625% senior unsecured notes due 2029 (the “Senior Unsecured Notes”), in a private placement, resulting in gross proceeds of approximately $288.6 million. For a description of the ~~safety~~terms and conditions of the Senior Unsecured Notes, please see “Note 6 – Debt and Series B Preferred Stock” in the notes to our ~~employees and ensuring that our construction sites are managed by taking all reasonable precautions to protect on-site personnel.~~Condensed Consolidated Financial Statements.

We are actively monitoring the COVID-19 pandemic, including disease progression, vaccine response and availability, federal, state and local government actions, the Center for Disease Control (“CDC”) and World Health Organization (“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.Credit Agreement

~~We believe that~~As previously disclosed, on August 17, 2021, Services, as the ~~foregoing actions have significantly reduced~~borrower, and certain guarantors (including the ~~Company’s exposure to~~Company), entered into a Credit Agreement (the “Credit Agreement”) with a syndicate of lenders and CIBC Bank USA in its capacities as the ~~effects~~Administrative and Collateral Agent for the lenders. The Credit Agreement provides for a $150 million senior secured revolving credit facility, is guaranteed by the Company and certain subsidiaries of ~~COVID-19, including our workforce’s exposure to infection from COVID-19. As~~the Company and is secured by a security interest in substantially all their personal property and assets. For a description of ~~today, we have had a low incidence~~the terms and conditions of ~~infection~~the Credit Agreement, please see “Note 6 – Debt and Series B Preferred Stock” in ~~our workforce. As vaccines become increasingly available~~the notes to our ~~workforce, clients and their families, we are evaluating and redoing protocols as management deems appropriate and based on federal, state and local government recommendations and policies.~~Condensed Consolidated Financial Statements.

We have noticed an impact of COVID-19 in adding new projects to our backlog. Our bidding activity continues at very high levels, but the final approval process for some projects, especially in our Specialty Segment, has been slowed due to COVID-19. Despite that, we were able to maintain a relatively consistent total backlog for June 30, 2021 compared to December 31, 2020.Transaction Agreement

We are unable to predict whether COVID-19 will continue to negatively impact the construction business and the degree of such impact as more of the population becomes vaccinated. We do not believe that COVID-19 is having a negative impactAs previously disclosed, on our liquidity. We could see a change in this status if we experience future work stoppages at our projects due to significant supply chain or production disruptions, 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,July 28, 2021, the Company ~~is unable to predict any changes~~entered into a Transaction Agreement (the “Transaction Agreement”) with Ares Special Situations Fund IV, L.P. (“ASSF”) and ASOF Holdings I, L.P. (“ASOF” and, together with ASSF, the “Ares Parties”). The Transaction Agreement resulted in, ~~the market for bonding by our sureties.~~among other things:

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•The redemption by us of all of our Series B Preferred Stock, par value $0.0001 per share (“Series B Preferred Stock”) using proceeds from our offering of Senior Unsecured Notes, Common Stock and Pre-Funded Warrants;

•The repayment of the term loan (“Term Loan”) under our Third A&R Credit Agreement, dated May 15, 2019, as amended (the “Third A&R Credit Agreement”), using proceeds from our offering of Senior Unsecured Notes, Common Stock and Pre-Funded Warrants;

•The Ares Parties converting all of their Series A Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”) (consisting of all of our issued and outstanding shares of Series A Preferred Stock), into 2,132,273 shares of Common Stock;

•The issuance to the Ares Parties of 507,417 and other parties of 141,651 shares of Common Stock for certain anti-dilution rights triggered upon conversion of the Series A Preferred Stock described above; and

•The issuance to the Ares Parties of 5,996,310 shares of Common Stock in connection with their exercise of warrants that were issued to the Ares Parties in connection with their original purchases of Series B Preferred Stock.

The following tables illustrate the changes in our outstanding common stock and the use of proceeds from the transactions described above.


Shares Issued
Shares Outstanding June 30, 2021	25,150,306
Issuance of Common Stock	7,362,827
Issuance of Common Stock - Ares	3,185,039
Series B warrants converted to Common Stock - Ares	5,996,310
Series A conversion - Ares	2,132,273
Series A anti dilution shares - Ares and other parties	649,068
Other equity activity	78,079
Shares Outstanding September 30, 2021	44,553,902

Use of Proceeds ($ in millions)
Proceeds from Equity transaction	$	193.5
Proceeds from Debt transaction	288.6
Total proceeds	$	482.1

Series B Preferred Stock payoff	$	(264.9)
Term Loan payoff	(173.3)
Revolver and letter of credit payoff	(22.4)
Total use of proceeds	$	(460.6)

Current Quarter Financials

Key financial results for the quarter ended ~~June~~September 30, 2021 include:

•Consolidated revenues increased ~~16.6%~~33.6% to ~~$560.1~~$697.8 million as compared to ~~$480.6~~$522.2 million for the quarter ended ~~June~~September 30, 2020, of which ~~75.8%~~74.1% was attributable to the Renewables segment and ~~24.2%~~25.9% was attributable to the Specialty Civil segment;

•Operating income ~~decreased $3.6~~increased $6.4 million, to ~~$22.6~~$35.6 million as compared to income of ~~$26.2~~$29.2 million for the quarter ended ~~June~~September 30, 2020;

•Completed equity offering and debt transactions mentioned above in the current quarter that redeemed all Series B Preferred Stock and the extinguishment of our previous term loan, which resulted in debt extinguishment costs of $101.0 million and fair value adjustment of warrant liability of $18.5 million;

•Net income ~~increased 30.6%, or $1.1~~decreased $110.9 million, to ~~net income~~a loss of ~~$4.7~~$99.6 million as compared to ~~$3.6~~income of $11.3 million for the quarter ended ~~June~~September 30, ~~2020;~~2020 due to the debt and equity transactions mentioned above; and

•Backlog increased ~~33.5%~~30.3%, or ~~$692.3~~$627.8 million to ~~$2.8~~$2.7 billion as compared to $2.1 billion for the year ended December 31, 2020.

Trends and Future Opportunities

Business Environment

We believe there are long-term growth opportunities across our industries, and we continue to have a positive long-term outlook. Although not without risks and challenges, including those discussed in “Significant Factors Impacting Results”

and in “Forward-Looking Statements” and items referred to in Item 1A. Risk Factors disclosed in the Company's Annual Report. We believe that with our full-service operations, broad geographic reach, financial position and technical expertise, we are well positioned to mitigate these risks and continue to capitalize on opportunities and trends in our industries.

Labor Shortage. We continue to address the longer-term need for additional labor resources in our markets, as our customers continue to seek additional specialized labor resources to address an aging workforce and longer-term labor availability issues, increasing pressure to reduce costs and improve reliability, and increasing duration and complexity of their capital programs. We believe these trends will continue, possibly to such a degree that demand for labor resources will outpace supply. Furthermore, the cyclical nature of the Renewable and to a certain extent parts of our Specialty Civil segment can create shortages of qualified labor in those markets during periods of high demand. Our ability to capitalize on available opportunities is limited by our ability to employ, train and retain the necessary skilled personnel, and therefore we are taking proactive steps to develop our workforce, including through strategic relationships with universities, the military and unions and the expansion and development of our training facility and postsecondary educational institution. Although we believe these initiatives will help address workforce needs, meeting our customers’ demand for labor resources could remain challenging.

Additionally, we believe that labor costs will increase given the recent escalated inflationary environment in the United States. Our labor costs are typically passed through in our contracts, and the portion of our workforce that is represented by labor unions typically operate under multi-year collective bargaining agreements, which provide some visibility into future labor costs. As a result, while we continue to monitor our labor markets, we do not currently believe this environment will present a material risk to our profitability and would expect to be able to adjust contract pricing with customers to the extent wages and other labor costs increase, whether due to renegotiation of collective bargaining agreements or market conditions.

Supply Chain Disruption. The world’s biggest solar panel manufacturers have recently been warning of panel shortages amid disruptions in the supply chain and rising material prices. These manufactures have stated that output will be constrained because key component suppliers will be running at less than full capacity in the near future. The reduction in supply is also coupled with the Department of Commerce considering 50% to 250% tariffs on imported solar panels from Southwest Asia. A majority of the United States crystalline silicon solar module imports in the first half of 2021 came from this geographic location. We believe that these disruptions and material price increases could cause a delay in construction schedules for 2022, inefficiencies in our build schedules and fluctuations to our revenue projections.

Regulatory Challenges. The regulatory environment creates both challenges and opportunities for our business, and in recent years heavy civil and rail construction have been impacted by regulatory and permitting delays in certain periods, particularly with respect to regulatory and environmental permitting processes continue to create uncertainty for projects and negatively impact customer spending, and delays have increased as the COVID-19 pandemic has impacted regulatory agency operations.

However, we believe that there are also several existing, pending or proposed legislative or regulatory actions that may alleviate certain regulatory and permitting issues and positively impact long-term demand, particularly in connection with infrastructure and renewable energy spending. For example, regulatory changes affecting siting and

right-of-way processes could potentially accelerate construction for transmission projects, and state and federal reliability standards are creating incentives for system investment and maintenance. Additionally, as described above, we consider renewable energy, including solar and wind generation facilities, to be an ongoing opportunity; however, policy and economic incentives designed to support and encourage such projects can create variability of project timing.

Renewables Segment

The Renewables segment was impacted by the following significant operational trends:

•Revenue increased ~~31.0%~~58.1% to ~~$424.9~~$517.2 million for the quarter ended ~~June~~September 30, 2021 as compared to ~~$324.3~~$327.1 million.

•Revenues increased primarily due to wind projects that started later in 2021 compared to 2020. Further, higher demand persists in our solar market as projects continue to increase due to our consistent, safe and reliable performance with our customers on our wind projects, that has allowed us to capture further solar opportunities in backlog for 2021 and beyond.

•~~Gross profit increased 16.0% to $42.9 million for the quarter ended June 30, 2021 as compared to $37.0 million.~~

We have maintained a heavy focus on construction of renewable power production capacity as renewable energy, particularly from wind and solar, has become widely accepted within the electric utility industry and has become a cost-effective solution for the creation of new generating capacity. We believe that this shift coupled with the below, will continue to drive opportunity in this segment over the long-term:

•The current administration has a goal of investing $2 trillion in modern, sustainable, and clean energy infrastructure.

•Renewable energy power generation has reached a level of scale and maturity that permits these technologies to now be cost-effective competitors to more traditional power generation technologies, including on an unsubsidized basis. The most significant changes have been related to increased turbine sizes and better battery storage methods.

•Over 40 states and the District of Colombia have adopted renewable portfolio standards for clean energy.

•In December 2020, there was a one year extension of the PTC at 60% for projects that begin construction prior to December 31, 2021 and a two year extension of 26% Solar Investment Tax Credit (“ITC”) to 2022 (22% credit extended through 2023).

•On June 29, 2021, the IRS issued a notice which provides that projects that began construction in 2016-2019 have six years, and projects that began construction in 2020 have five years from the date construction began to be placed-in-service to qualify for the PTC or ITC that was in effect when construction began. This new rule effectively extends the amount of time that many projects will be eligible for PTC to 2025.

As a result, wind and solar power are among the leading sources of new power generation capacity in the U.S., and the Company does not anticipate this trend to change in the near future as we are continuing to see growth through new awards in our backlog:


(in millions)	(in millions)									(in millions)
Segment	Segment	December 31, 2020		New Awards in 2021(1)		Revenue Recognized in 2021		Backlog at June 30, 2021(2)		Segment	December 31, 2020		New Awards in 2021(1)		Revenue Recognized in 2021		Backlog at September 30, 2021(2)
Renewables	Renewables	$	1,513.4	$	952.9	$	605.2	$	1,861.1	Renewables	$	1,513.4	$	1,382.9	$	1,122.4	$	1,773.9

(1) New awards consist of the original contract price of projects added to our backlog plus or minus subsequent changes to the estimated total contract price of existing contracts.

Such differences relate to the timing of executing a formal contract or receiving a notice to proceed. More specifically, backlog sometimes may include awards for which a contract has not yet been executed or a notice to proceed has not been issued, but for which there are no remaining major uncertainties that the project will proceed (e.g., adequate funding is in place).

Specialty Civil Segment

The Specialty Civil segment was impacted by the following significant operational trends:

•Revenue decreased ~~13.5%~~7.5% to ~~$135.3~~$180.6 million for the quarter ended ~~June~~September 30, 2021 as compared to ~~$156.3~~$195.2 million.

•~~Gross profit~~ The revenue decrease ~~38.6% to $10.6 million for the quarter ended June 30, 2021 as compared to $17.3 million~~

•~~Revenue and gross profit decreases~~ for the three months ended ~~are~~is primarily due to challenges in the following end markets:

◦The heavy civil construction market has seen increased competition in a few of our end ~~markets, which has led to lower margins on certain heavy civil construction projects reducing overall profitability.~~markets.

◦The rail market has been negatively impacted by the COVID-19 pandemic and the reduction of spending budgets of some of our customers, which has led to further delays on portions of our large rail jobs. However, we have recently seen increased bidding opportunities.

◦All of our end markets in this segment have experienced delays in timing related to obtaining governmental approvals and environmental permitting that have affected the start and bidding opportunities of certain projects.

•Despite the delays in project starts mentioned above we continued to see a strong bidding environment in the heavy civil construction and environmental remediation end markets for 2021 and had significant awarded projects related to:

◦The environmental remediation market continues to provide opportunities for growth and the Company has been awarded a very significant project that started in 2021, coupled with the Company being short listed on some very significant ~~project~~projects with anticipated start dates in ~~2021; and~~2022.

◦The heavy civil construction market continues to be consistent year over year for awarded projects.

◦

The rail market has started to see a small turnaround in bidding as our customer's spending budgets have increased. This has increased the number of larger rail jobs available for 2022 construction.

We believe that our business relationships with customers in these sectors are excellent and the strong reputation that our ~~acquired~~ companies have built has provided us with the right foundation to continue to grow our revenue base. The drivers to further growing this segment are as follows:

•The FMI 2021 Overview Report published in the first quarter of 2021 projects that nonresidential construction put in place for the United States will be over $500 billion per year from 2021 to 2024.

•Fast Act extension and highway trust fund infusion of $13.6 billion for the highway and transit account.

•According to the American Coal Ash Association, coal combustion residuals “CCRs” or “coal ash” are produced by coal-fired power plants and represent one of the largest categories of industrial waste in the U.S., as 78.6 million tons of CCRs were produced in 2019. The Company anticipates this could be a $50.0 billion industry over the next ten years.

Additionally, there is significant overlap in labor, skills and equipment needs between our Renewables segment and our Specialty Civil segment, which we expect will continue to provide us with operating efficiencies as we continue to expand this sector. The Company continues to cross leverage these two segments and continues to see future growth through new awards in our backlog:

(in millions)
Segment December 31, 2020
New Awards in 2021(1)
Revenue Recognized in 2021
Backlog at June 30, 2021(2)
Specialty Civil $ 556.1 $ 575.9 $ 231.3 $ 900.7


(in millions)
Segment	December 31, 2020		New Awards in 2021(1)		Revenue Recognized in 2021		Backlog at September 30, 2021(2)
Specialty Civil	$	556.1	$	779.2	$	411.9	$	923.4

(1) New awards consist of the original contract price of projects added to our backlog plus or minus subsequent changes to the estimated total contract price of existing contracts.

(2) Backlog may differ from the transaction prices allocated to the remaining performance obligations as disclosed in Note 1. Business, Basis of Presentation and Significant Accounting Policies included in Part I, Item 1 of this Quarterly Report. Such differences relate to the timing of executing a formal contract or receiving a notice to proceed. More specifically, backlog sometimes may include awards for which a contract has not yet been executed or a notice to proceed has not been issued, but for which there are no remaining major uncertainties that the project will proceed (e.g., adequate funding is in place).

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.

The following table summarizes our backlog by segment as of ~~June~~September 30, 2021 and December 31, 2020:


(in millions)	(in millions)					(in millions)
Segments	Segments	June 30, 2021		December 31, 2020		Segments	September 30, 2021		December 31, 2020
Renewables	Renewables	$	1,861.1	$	1,513.4	Renewables	$	1,773.9	$	1,513.4
Specialty Civil	Specialty Civil	900.7		556.1		Specialty Civil	923.4		556.1

Total	Total	$	2,761.8	$	2,069.5	Total	$	2,697.3	$	2,069.5

The Company expects to recognize ~~65.6%~~61.6% of revenue related to its backlog in the next twelve months.

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.

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 8, 2021 for a discussion of the risks associated with our backlog.

Significant Factors Impacting Results

Our revenues, margins and other results of operations can be influenced by a variety of factors in any given period, including those described in Results of Operations and Forward Looking Statements, and those factors have caused fluctuations in our results in the past and are expected to cause fluctuations in our results in the future. Additional information with respect to certain of those factors is provided below.

Seasonality. Typically, our revenues are lowest in the first quarter of the year because cold, snowy or wet conditions can create challenging working environments that are more costly for our customers or cause delays on projects. In addition, infrastructure projects often do not begin in a meaningful way until our customers finalize their capital budgets, which typically occurs during the first quarter. Second quarter revenues are typically higher than those in the first quarter, as some projects begin, but continued cold and wet weather can often impact productivity. Third quarter revenues are typically the highest of the year, as a greater number of projects are underway and operating conditions, including weather, are normally more accommodating. Generally, revenues during the fourth quarter are lower than the third quarter but higher than the second quarter, as many projects are completed and customers often seek to spend their capital budgets before year end. However, the holiday season and inclement weather can sometimes cause delays during the fourth quarter, reducing revenues and increasing costs.

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 less impacted by severe weather. While the first and second quarter revenues are typically lower than the third and fourth quarter, we believe this geographical diversity has allowed this segment to be less seasonal over the course of the year.

Weather and Natural Disasters. The results of our business in a given period can be impacted by adverse weather conditions, severe weather events or natural disasters, which include, among other things, heavy or prolonged snowfall or rainfall, hurricanes, tropical storms, tornadoes, floods, blizzards, extreme temperatures, wildfires, pandemics and earthquakes. These conditions and events can negatively impact our financial results due to the termination, deferral or delay of projects, reduced productivity and exposure to significant liabilities.

Cyclical demand. 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 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.

Revenue mix. The mix of revenues based on the types of services we provide in a given period will impact margins, as certain industries and services provide higher-margin opportunities. Revenue derived from projects billed on a fixed-price basis totaled ~~99.3%~~99.5% for the three months ended ~~June~~September 30, 2021. 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 totaled ~~0.7%~~0.5% of consolidated revenue for the three months ended ~~June~~September 30, 2021.

Size, scope and complexity of projects. Larger or more complex projects with design or construction complexities; more difficult terrain requirements; or longer distance requirements typically yield opportunities for higher margins as we

assume a greater degree of performance risk and there is greater utilization of our resources for longer construction timeframes. Furthermore, smaller or less complex projects typically have a greater number of companies competing for them, and competitors at times may more aggressively pursue available work. A greater percentage of smaller scale or less complex work also could negatively impact margins due to the inefficiency of transitioning between a larger number of smaller projects versus continuous production on fewer larger projects. Also, at times we may choose to maintain a portion of our workforce and equipment in an underutilized capacity to ensure we are strategically positioned to deliver on larger projects when they move forward.

Project variability and performance. Margins for a single project may fluctuate period to period due to changes in the volume or type of work performed, the pricing structure under the project contract or job productivity. Additionally, our productivity and performance on a project can vary from period to period based on a number of factors, including unexpected project difficulties or site conditions; project location, including locations with challenging operating conditions; whether the work is on an open or encumbered right of way; inclement weather or severe weather events; environmental restrictions or regulatory delays; protests, other political activity or legal challenges related to a project; and the performance of third parties.

Subcontract work and provision of materials. Work that is subcontracted to other service providers generally yields lower margins, and therefore an increase in subcontract work in a given period can decrease margins. Our customers are usually responsible for supplying the materials for their projects; however, under some contracts we agree to procure all or part of the required materials. Margins may be lower on projects where we furnish a significant amount of materials, including projects where we provide engineering, procurement and construction ("EPC") services, as our markup on materials is generally lower

than our markup on labor costs. Furthermore, fluctuations in the price of materials we procure, including as a result of changes in U.S. or global trade relationships or other economic or political conditions, may impact our margins. In a given period, an increase in the percentage of work with higher materials procurement requirements may decrease our overall margins. See further discussion above in "Business Environment".

Coronavirus Pandemic Update

The COVID-19 pandemic continues to significantly impact the United States and the world. Since the start of the COVID-19 pandemic, we have been 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 are actively monitoring the COVID-19 pandemic, including disease and variant progression, vaccine response and availability, federal, state and local government actions, the Center for Disease Control (“CDC”) and World Health Organization (“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 low incidence of infection in our workforce. As vaccines become increasingly available to our workforce, clients and their families, we are evaluating and redoing protocols as management deems appropriate and based on federal, state and local government recommendations and policies.

We have noticed an impact of COVID-19 in adding new projects to our backlog. Our bidding activity continues at very high levels, but the final approval process for some projects, especially in our Specialty Segment, has been slowed due to COVID-19. Despite that, we were able to increase total backlog for September 30, 2021 compared to December 31, 2020.

We are unable to predict whether COVID-19 will continue to negatively impact the construction business and the degree of such impact as more of the population becomes vaccinated. 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 future work stoppages at our projects due to significant supply chain or production disruptions, which would prevent us from billing customers for new work performed. Additionally, we could experience a change if we experience future work stoppages, shortages or disruptions as a result of seeking to comply with forthcoming federal vaccine mandate rules from the Occupational Safety and Health Administration. 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.

Results of Operations

Three Months Ended ~~June~~September 30, 2021 and 2020

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


		Three Months Ended June 30,									Three Months Ended September 30,
(in thousands)	(in thousands)	2021				2020				(in thousands)	2021				2020

Revenue	Revenue	$	560,148	100.0	%	$	480,604	100.0	%	Revenue	$	697,759	100.0	%	522,232	100.0	%
Cost of revenue	Cost of revenue	506,665		90.5	%	426,363		88.7	%	Cost of revenue	625,589		89.7	%	463,343	88.7	%
Gross profit	Gross profit	53,483		9.5	%	54,241		11.3	%	Gross profit	72,170		10.3	%	58,889	11.3	%
Selling, general and administrative expenses	Selling, general and administrative expenses	30,894		5.5	%	28,074		5.8	%	Selling, general and administrative expenses	36,539		5.2	%	29,656	5.7	%

Income from operations	Income from operations	22,589		4.0	%	26,167		5.4	%	Income from operations	35,631		5.1	%	29,233	5.6	%
Interest expense, net	Interest expense, net	(14,495)		(2.6)	%	(16,200)		(3.4)	%	Interest expense, net	(9,403)		(1.3)	%	(14,975)	(2.9)	%

Loss on extinguishment of debt										Loss on extinguishment of debt	(101,006)		(14.5)	%	—	—	%
Warrant liability fair value adjustment										Warrant liability fair value adjustment	(17,582)		(2.5)	%	3,000	0.6	%
Other income (expense)	Other income (expense)	770		0.1	%	(1,631)		(0.3)	%	Other income (expense)	(5,040)		(0.7)	%	161	—	%
Income from continuing operations before income taxes	Income from continuing operations before income taxes	8,864		1.6	%	8,336		1.7	%	Income from continuing operations before income taxes	(97,400)		(14.0)	%	17,419	3.3	%
Provision for income taxes	Provision for income taxes	(4,165)		(0.7)	%	(4,739)		(1.0)	%	Provision for income taxes	(2,249)		(0.3)	%	(6,153)	(1.2)	%

Net income	Net income	$	4,699	0.8	%	$	3,597	0.7	%	Net income	$	(99,649)	(14.3)	%	11,266	2.2	%

For a detailed discussion of Revenue and Gross profit see Segment Results, below.

Revenue. Revenue increased ~~16.6%~~33.6%, or ~~$79.5~~$175.5 million, in the ~~second~~third quarter of 2021, compared to the same period in 2020.

Gross profit. Gross profit ~~decreased 1.4%~~increased 22.6%, or ~~$0.8~~$13.3 million, in the ~~second~~third quarter of 2021, compared to the same period in 2020. As a percentage of revenue, gross profit was ~~9.5%~~10.3% in the quarter, as compared to 11.3% in the prior-year period.

Selling, general and administrative expenses. Selling, general and administrative expenses increased ~~10.0%~~23.2%, or ~~$2.8~~$6.9 million, in the ~~second~~third quarter of 2021, compared to the same period in 2020. Selling, general and administrative expenses were

~~5.5%~~ 5.2% of revenue in the ~~second~~third quarter of 2021, compared to ~~5.8%~~5.7% in the same period in 2020. The increase in selling, general and administrative expenses was primarily driven by:

•Staff related benefit costs of ~~$1.4~~$1.9 million;

•Business travel costs of $1.5 million;

•Information technology costs of ~~$0.6~~$1.1 million related to software licensing;

•Stock compensation expense of $0.4 million; and

•~~Business travel~~Other miscellaneous selling, general and administrative costs of ~~$0.7~~$2.0 million.

Interest expense, net. Interest expense, net decreased by ~~$1.7~~$5.6 million, in the ~~second~~third quarter of 2021, compared to the same period in 2020. This decrease was primarily driven by ~~lower effective~~the redemption of Series B Preferred Stock in August 2021 resulting in less interest ~~rates on our term loan, partially offset by an increase~~ in the ~~dividend rate of 13.5% on the Company's preferred Series B stock dividend. The increase in rate was due~~current quarter compared to ~~the Company's net lien leverage ratio being above 1.5:1.0.~~prior year.

Other income (expense). Other income (expense) ~~increased~~, for discussion, includes Loss on extinguishment of debt, Warrant liability fair value adjustment and Other income (expense) decreased by ~~$2.4~~$126.8 million, to ~~income~~expense of ~~$0.8~~$123.6 million in the ~~second~~third quarter of 2021 compared to ~~an expense~~income of ~~$1.6~~$0.2 million for the same period in 2020. This ~~increase~~decrease was primarily the result of ~~the impact of a decrease~~increases in the ~~warrant~~following:

•Loss on debt extinguishment of $101.0 million;

•Warrant liability ~~in the second quarter~~fair market value increase of ~~2021.~~ $17.6 million; and

•Other expense related to transaction costs of $5.1 million.

See further discussion in Note 5. Fair Value of Financial Instrumentsand Note 6. Debt and Series B Preferred Stock included in Item 1 of this Quarterly Report on Form 10-Q.

Provision for income taxes. Provision for income taxes decreased ~~$0.6~~$3.9 million, to ~~$4.2~~$2.2 million in the ~~second~~third quarter of 2021, compared to ~~$4.7~~$6.2 million for the same period in 2020. The effective tax rates for the period ended ~~June~~September 30, 2021 and 2020 were ~~47.0%~~(2.3)% and ~~56.8%~~35.3%, respectively. The lower effective tax rate in the ~~second~~third quarter of 2021 was primarily attributable to lower permanent differences related to interest and other expenses accrued for the Series B Preferred Stock and executive compensation, which are not deductible for federal and state income taxes. There were no changes in uncertain tax positions during the periods ended ~~June~~September 30, 2021 and 2020.

Segment Results

The Company operated our business as two reportable segments: the Renewables segment and the Specialty Civil segment. 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.

The following table sets forth segment revenues and gross profit for the years indicated, as well as the dollar and percentage change from the prior year:


		Three Months Ended June 30,									Three Months Ended September 30,
(in thousands)	(in thousands)	2021				2020				(in thousands)	2021				2020
Segment	Segment	Revenue		% of Total Revenue		Revenue		% of Total Revenue		Segment	Revenue		% of Total Revenue		Revenue		% of Total Revenue
Renewables	Renewables	$	424,854	75.8	%	$	324,262	67.5	%	Renewables	$	517,172	74.1	%	$	327,051	62.6	%
Specialty Civil	Specialty Civil	135,294		24.2	%	156,342		32.5	%	Specialty Civil	180,587		25.9	%	195,181		37.4	%

Total revenue	Total revenue	$	560,148	100.0	%	$	480,604	100.0	%	Total revenue	$	697,759	100.0	%	$	522,232	100.0	%

Segment	Segment	Gross Profit		Gross Profit Margin		Gross Profit		Gross Profit Margin		Segment	Gross Profit		Gross Profit Margin		Gross Profit		Gross Profit Margin
Renewables	Renewables	$	42,883	10.1	%	$	36,983	11.4	%	Renewables	$	51,867	10.0	%	$	37,371	11.4	%
Specialty Civil	Specialty Civil	10,600		7.8	%	17,258		11.0	%	Specialty Civil	20,303		11.2	%	21,518		11.0	%
Total gross profit	Total gross profit	$	53,483	9.5	%	$	54,241	11.3	%	Total gross profit	$	72,170	10.3	%	$	58,889	11.3	%

Renewables Segment Results

Revenue. Renewables revenue was ~~$424.9~~$517.2 million for the quarter ended ~~June~~September 30, 2021 as compared to ~~$324.3~~$327.1 million for the same period in 2020, an increase of ~~31.0%~~58.1%, or ~~$100.6~~$190.1 million. The increase in revenue was primarily due to:

•The Company had 1317 wind projects of greater than $5.0 million of revenue in the ~~second~~third quarter of 2021 compared to 1520 wind projects during the same period in ~~2020,~~2020;

•The average revenue of the 1317 wind projects was ~~$21.8~~$28.5 million in 2021 compared to ~~$20.3~~$15.5 million related to the 1520 wind projects during the same period in ~~2020,~~2020; and

•Solar revenue increased ~~$100.7~~$35.0 million for the quarter ended ~~June~~September 30, 2021 when compared to the same period for 2020.

Gross profit. Renewables gross profit was ~~$42.9~~$51.9 million for the quarter ended ~~June~~September 30, 2021 as compared to ~~$37.0~~$37.4 million for 2020, an increase of ~~16.0%~~38.8%, or ~~$5.9~~$14.5 million. As a percentage of revenue, gross profit was ~~10.1%~~10.0% in 2021, as compared to 11.4% in 2020. The decrease in percentage was primarily due to challenges related to ~~adding more craft labor and rented and leased equipment~~hurricane-related rainfall coupled with supply chain disruption in ~~anticipation of higher work volumes and greater operating intensity~~our solar business that caused inefficiencies in ~~the second half of the year.~~project sequencing on a few large projects.

Specialty Civil Segment Results

Revenue. Specialty Civil revenue was ~~$135.3~~$180.6 million for the quarter ended ~~June~~September 30, 2021 as compared to ~~$156.3~~$195.2 million for 2020, a decrease of ~~13.5%~~7.5%, or ~~$21.0~~$14.6 million. The decrease in revenue was primarily due to:

•Heavy civil ~~market~~and rail markets had less construction projects and a lower average value of projects in the ~~second~~third quarter of 2021 compared to ~~2020,~~2020; and

•Offsetting the decrease in revenue was a slight increase in our environmental remediation market due to ~~more~~larger projects in the ~~second~~third quarter of 2021.

Gross profit. Specialty Civil gross profit was ~~$10.6~~$20.3 million for the quarter ended ~~June~~September 30, 2021 as compared to ~~$17.3~~$21.5 million for 2020, a decrease of ~~38.6%~~5.6%, or ~~$6.7~~$1.2 million. As a percentage of revenue, gross profit was ~~7.8%~~11.2% in 2021, as compared to 11.0% in 2020. InThe increase in percentage was primarily due to growth in the ~~second quarter of 2021,~~environmental remediation market and the ~~Company had less projects under construction which contributed~~project mix compared to ~~lower utilization of labor and equipment fixed costs.~~prior year.

Results of Operations

~~Six~~Nine Months Ended ~~June~~September 30, 2021 and 2020

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


		Six Months Ended June 30,									Nine Months Ended September 30,
(in thousands)	(in thousands)	2021				2020				(in thousands)	2021				2020

Revenue	Revenue	$	836,560	100.0	%	$	838,767	100.0	%	Revenue	$	1,534,319	100.0	%	$	1,360,999	100.0	%
Cost of revenue	Cost of revenue	766,536		91.6	%	751,485		89.6	%	Cost of revenue	1,392,125		90.7	%	1,214,828		89.3	%
Gross profit	Gross profit	70,024		8.4	%	87,282		10.4	%	Gross profit	142,194		9.3	%	146,171		10.7	%
Selling, general and administrative expenses	Selling, general and administrative expenses	55,740		6.7	%	57,558		6.9	%	Selling, general and administrative expenses	92,279		6.0	%	87,214		6.4	%

Income from operations	Income from operations	14,284		1.7	%	29,724		3.5	%	Income from operations	49,915		3.3	%	58,957		4.3	%
Interest expense, net	Interest expense, net	(28,854)		(3.4)	%	(32,265)		(3.8)	%	Interest expense, net	(38,257)		(2.5)	%	(47,240)		(3.5)	%

Loss on extinguishment of debt										Loss on extinguishment of debt	(101,006)		(6.6)	%	—		—	%
Warrant liability fair value adjustment										Warrant liability fair value adjustment	(17,216)		(1.1)	%	171		—	%
Other income (expense)	Other income (expense)	608		0.1	%	(2,733)		(0.3)	%	Other income (expense)	(4,798)		(0.3)	%	257		—	%
Loss from continuing operations before income taxes	Loss from continuing operations before income taxes	(13,962)		(1.7)	%	(5,274)		(0.6)	%	Loss from continuing operations before income taxes	(111,362)		(7.3)	%	12,145		0.9	%
Provision for income taxes	Provision for income taxes	(1,773)		(0.2)	%	(3,872)		(0.5)	%	Provision for income taxes	(4,022)		(0.3)	%	(10,025)		(0.7)	%

Net loss	Net loss	$	(15,735)	(1.9)	%	$	(9,146)	(1.1)	%	Net loss	$	(115,384)	(7.5)	%	$	2,120	0.2	%

For a detailed discussion of Revenue and Gross profit see Segment Results, below.

Revenue. Revenue ~~decreased 0.3%~~increased 12.7%, or ~~$2.2~~$173.3 million, in the first ~~six~~nine months of 2021, compared to the same period in 2020.

Gross profit. Gross profit decreased ~~19.8%~~2.7%, or ~~$17.3~~$4.0 million, in the first ~~six~~nine months of 2021, compared to the same period in 2020. As a percentage of revenue, gross profit was ~~8.4% in the quarter,~~9.3%, as compared to ~~10.4%~~10.7% in the prior-year period.

Selling, general and administrative expenses. Selling, general and administrative expenses ~~decreased 3.2%~~increased 5.8%, or ~~$1.8~~$5.1 million, in the first ~~six~~nine months of 2021, compared to the same period in 2020. Selling, general and administrative expenses were ~~6.7%~~6.0% of revenue in the first ~~six~~nine months of 2021, compared to ~~6.9%~~6.4% in the same period in 2020. The ~~decrease~~increase in selling, general and administrative expenses was primarily driven by:

•~~Reduction in staff related benefit costs by $2.9 million.~~

~~The reduction above was partially offset by expense increase for:~~

•Information technology costs of ~~$1.2~~$2.3 million related to software ~~licensing.~~licensing;

•Business travel costs of $1.7 million; and

•Stock-based compensation of $1.1 million.

Interest expense, net. Interest expense, net decreased by ~~$3.4~~$9.0 million in the first ~~six~~nine months of 2021, compared to the same period in 2020. This decrease was primarily driven by ~~lower effective interest rates on our term loan.~~the redemption of Series B Preferred Stock.

Other income (expense). Other income (expense) ~~increased~~, for discussion, includes Loss on extinguishment of debt, Warrant liability fair value adjustment and Other income (expense) decreased by ~~$3.3~~$123.4 million, to ~~income~~expense of ~~$0.6~~$(123.0) million in the first ~~six~~nine months of 2021 compared to ~~an expense~~income of ~~$2.7~~$0.3 million for the same period in 2020. This ~~increase~~decrease was primarily the result of ~~the impact of a decrease~~increases in the ~~warrant~~following:

•Loss on debt extinguishment of $101.0 million;

•Warrant liability ~~in the first six months~~fair market value increase of ~~2021.~~ $17.2 million; and

•Other expense related to transaction costs of $5.1 million.

See further discussion in Note 5. Fair Value of Financial Instrumentsand Note 6. Debt and Series B Preferred Stock included in Item 1 of this Quarterly Report on Form 10-Q.

Provision for income taxes. Provision for income taxes decreased ~~$2.1~~$6.0 million, to ~~$1.8~~$4.0 million in the first ~~six~~nine months of 2021, compared to ~~$3.9~~$10.0 million for the same period in 2020. The effective tax rates for the first ~~six~~nine months of 2021 and 2020 were ~~(12.7)~~(3.6)% and ~~(73.4)%~~82.5%, respectively. The lower effective tax rate in the first ~~six~~nine months of 2021 was primarily attributable to lower permanent differences related to interest and other expenses accrued for the Series B Preferred Stock and executive compensation, which are not deductible for federal and state income taxes. There were no changes in uncertain tax positions during the periods ended ~~June~~September 30, 2021 and 2020.

Segment Results

The following table sets forth segment revenues and gross profit for the years indicated, as well as the dollar and percentage change from the prior year:


		Six Months Ended June 30,									Nine Months Ended September 30,
(in thousands)	(in thousands)	2021				2020				(in thousands)	2021				2020
Segment	Segment	Revenue		% of Total Revenue		Revenue		% of Total Revenue		Segment	Revenue		% of Total Revenue		Revenue		% of Total Revenue
Renewables	Renewables	$	605,228	72.3	%	$	573,008	68.3	%	Renewables	$	1,122,400	73.2	%	$	900,059	66.1	%
Specialty Civil	Specialty Civil	231,332		27.7	%	265,759		31.7	%	Specialty Civil	411,919		26.8	%	460,940		33.9	%

Total revenue	Total revenue	$	836,560	100.0	%	$	838,767	100.0	%	Total revenue	$	1,534,319	100.0	%	$	1,360,999	100.0	%

Segment	Segment	Gross Profit		Gross Profit Margin		Gross Profit		Gross Profit Margin		Segment	Gross Profit		Gross Profit Margin		Gross Profit		Gross Profit Margin
Renewables	Renewables	$	55,063	9.1	%	$	62,812	11.0	%	Renewables	$	106,930	9.5	%	$	100,183	11.1	%
Specialty Civil	Specialty Civil	14,961		6.5	%	24,470		9.2	%	Specialty Civil	35,264		8.6	%	45,988		10.0	%
Total gross profit	Total gross profit	$	70,024	8.4	%	$	87,282	10.4	%	Total gross profit	$	142,194	9.3	%	$	146,171	10.7	%

Renewables Segment Results

Revenue. Renewables revenue was ~~$605.2~~$1,122.4 million for the first ~~six~~nine months of 2021 as compared to ~~$573.0~~$900.1 million for the same period in 2020, an increase of ~~5.6%~~24.7%, or ~~$32.2~~$222.3 million. The increase in revenue was primarily due to:

•Solar revenue increased ~~$134.0~~$169.0 million for the first ~~six~~nine months of 2021 when compared to the same period for ~~2020.~~2020; and

•Wind revenue increased $53.3 million for the first nine months of 2021 when compared to the same period for 2020, due to a 4% larger average value of project.

3239

~~The increase was partially offset by $101.8 million decrease in the wind market:~~

•~~The Company had 16 wind projects of greater than $5.0 million of revenue in the first six months of 2021 compared to 17 wind projects during the same period in 2020.~~

•~~The average revenue of the 16 wind projects in 2021, was $25.4 million with an average percentage of completion of 61%.~~

•~~The average revenue of the 17 wind projects in 2020 was $31.8 million with an average percentage of completion of 75% in 2020.~~

•~~The reduction in revenue for the year on wind projects was related to earlier project starts in 2020 compared to 2021.~~

Gross profit. Renewables gross profit was ~~$55.1~~$106.9 million for the first ~~six~~nine months of 2021 as compared to ~~$62.8~~$100.2 million for 2020, ~~a decrease~~an increase of ~~12.3%~~6.7%, or ~~$7.7~~$6.7 million. As a percentage of revenue, gross profit was ~~9.1%~~9.5% in 2021, as compared to ~~11.0%~~11.1% in 2020. The decrease in percentage was primarily due to challenges related to ~~adding more craft labor and rented and leased equipment~~hurricane-related rainfall coupled with supply chain disruption in ~~anticipation of higher work volumes and greater operating intensity in the second half of the year.~~our solar business caused inefficient working conditions on a few large projects.

Specialty Civil Segment Results

Revenue. Specialty Civil revenue was ~~$231.3~~$411.9 million for the first ~~six~~nine months of 2021 as compared to ~~$265.8~~$460.9 million for 2020, a decrease of ~~13.0%~~10.6%, or ~~$34.4~~$49.0 million. The decrease in revenue was primarily due to:

•Rail markets continue to experience a decrease in revenue primarily due to delay in project starts for railroads and lower budgets decreasing bidding ~~opportunities,~~opportunities;

•Heavy civil market had less construction projects and a lower average value of projects in the first ~~six~~nine months of 2021 compared to ~~2020,~~2020; and

•Offsetting the decrease in revenue was a slight increase in our environmental remediation market due to more projects in the first ~~six~~nine months of 2021 compared to 2020.

Gross profit. Specialty Civil gross profit was ~~$15.0~~$35.3 million for the first ~~six~~nine months of 2021 as compared to ~~$24.5~~$46.0 million for 2020, a decrease of ~~38.9%~~23.3%, or ~~$9.5~~$10.7 million. As a percentage of revenue, gross profit was ~~6.5% in 2021,~~8.6%, as compared to ~~9.2%~~10.0% during the same period in 2020. In the first ~~six~~nine months of 2021, the Company had less projects under construction in the heavy civil and rail markets, which contributed to lower utilization of labor and equipment fixed ~~costs.~~costs, partially offset by increases in the environmental remediation market.

Liquidity and Capital Resources

Overview

Our primary sources of liquidity are cash flows from operations, our cash balances and availability under our ~~Third A&R~~new Credit Agreement. Our primary liquidity needs are for working capital, debt service, ~~dividends on our Series B Preferred Stock,~~ income taxes, capital expenditures, insurance collateral, and strategic acquisitions. As of ~~June~~September 30, 2021, we had approximately ~~$117.7~~$158.3 million in cash, and ~~$53.3~~$116.3 million availability under our ~~Third A&R~~ Credit Agreement.

We anticipate that our existing cash balances, funds generated from operations, 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~~that are beyond our control. Please see “Item 1A. Risk Factors” in Part I of our Annual Report ~~on Form 10-K filed with the SEC on March 8, 2021~~ for a discussion of the risks associated with our liquidity.

Capital Expenditures

For the ~~six~~nine months ended ~~June~~September 30, 2021, we incurred ~~$15.5~~$22.7 million in finance lease payments and an additional ~~$14.6~~$24.0 million in cash purchases for equipment. We estimate that we will spend approximately two percent of revenue for capital expenditures for 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. 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 ~~June~~September 30, 2021,

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 to ~~$409.3~~$550.1 million as of ~~June~~September 30, 2021 from $309.0 million as of December 31, 2020, due primarily to 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:


		Six Months Ended June 30,			Nine Months Ended September 30,
(in thousands)	(in thousands)	2021	2020	(in thousands)	2021	2020

Net cash used in operating activities	Net cash used in operating activities	(11,378)	(64,630)	Net cash used in operating activities	1,296	(58,798)
Net cash used in investing activities	Net cash used in investing activities	(13,632)	(1,522)	Net cash used in investing activities	(21,043)	(1,729)
Net cash used in financing activities	Net cash used in financing activities	(21,357)	(21,715)	Net cash used in financing activities	13,968	(29,434)

Operating Activities. Net cash provided by operating activities for the nine months ended September 30, 2021 was $1.3 million, as compared to net cash used in operating activities ~~for the six months ended June 30, 2021 was $11.4 million, as compared to $64.6~~of $58.8 million over the same period in 2020. The ~~decrease~~increase in net cash ~~used~~provided by operating activities reflects the timing of receipts from customers and payments to vendors in the ordinary course of business. The change was primarily attributable to lower payments on payables and accrued liabilities ~~coupled with~~partially offset by lower collections of accounts receivable and contract assets due to the timing of projects.

Investing Activities. Net cash used in investing activities for the ~~six~~nine months ended ~~June~~September 30, 2021 was ~~$13.6~~$21.0 million, as compared to ~~$1.5~~$1.7 million over the same period in 2020. The increase in net cash used by investing activities was primarily attributable to an increase in purchases of property, plant and equipment.

Financing Activities. Net cash provided by financing activities for the nine months ended September 30, 2021 was $14.0 million, as compared to net cash used in financing activities ~~for the six months ended June 30, 2021 was $21.4 million, as compared to $21.7~~of $29.4 million over the same period in 2020.

~~Series A Preferred Stock~~

~~As of June 30, 2021, we had 17,483 shares of Series A Preferred Stock issued~~ The increase in net cash provided by financing activities was primarily attributable to proceeds from the debt and ~~outstanding. Each share of Series A Preferred Stock had an initial stated value of $1,000 per share (or approximately $17.5 million in~~equity offerings, offset by the aggregate). Dividends are paid on the Series A Preferred Stock as, if and when declared by our Board. To extent permitted and only as, if and when declared by our Board, 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.

~~If not paid in cash, dividends will accrue on the stated value and will increase the stated value on and effective as~~extinguishment of the applicable dividend date without any further action by the Board at 12% per annum. As of June 30, 2021, the Company had increased the initial stated value by $5.7 million in the aggregate rather than pay cash dividends.

~~So long as any shares of~~term loan and 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. The Company is currently restricted from paying cash dividends on Series A Preferred Stock because it has outstanding dividends that are accrued on the Series B preferred stock.

Stock.

The Series A Preferred Stock does 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.

Based on the stated value of the Series A Preferred Stock as of June 30, 2021 after giving effect to the accrual of dividends, we would be required to pay quarterly cash dividends in the aggregate of $0.6 million on the Series A Preferred Stock. If unpaid, the dividends will accrue at a rate of 12% per annum and increase the stated value of the Series A Preferred Stock. We do not presently expect to pay cash dividends.

~~Series B Preferred Stock~~

As of June 30, 2021, we had 199,474 shares of Series B Preferred Stock issued and outstanding. Each share of Series B Preferred Stock had an initial stated value of $1,000 per share (or approximately $199.5 million in the aggregate). 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, and only as, if and when declared by our Board, dividends are required to be paid in cash quarterly in arrears on each March 31, June 30, September 30 and December 31. For any dividend period that the Total Net Leverage Ratio is greater than 1.50:1.00, the dividend rate is 13.5% per annum; and otherwise at a rate of 12.0% 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 at a rate of 15%. As of June 30, 2021, the unpaid dividends had increased the initial stated value by $18.3 million in the aggregate.

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.

Based on the stated value of the Series B Preferred Stock as of June 30, 2021 after giving effect to the accrual of dividends, we would be required to pay quarterly cash dividends in the aggregate of $6.6 million on the Series B Preferred Stock. If not paid the dividends will accrue at a rate of 15% per annum and increase the stated value of the Series B Preferred Stock. Actual decisions 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.

Deferred Taxes - COVID-19

The CARES Act was enacted on March 27, 2020, in response to the COVID-19 emergency. The CARES Act includes many measures to assist companies, including temporary changes to income and non-income-based tax laws. Some of the key income tax-related provisions of the CARES Act include:

•Eliminating the 80% of taxable income limitation by allowing corporate entities to fully utilize net operating losses (“NOLs”) to offset taxable income in 2018, 2019 or 2020.

•Allowing NOLs originating in 2018, 2019 or 2020 to be carried back five years.

•Increasing the net interest expense deduction limit to 50% of adjusted taxable income from 30% for tax years beginning 1 January 2019 and 2020.

•Allowing taxpayers with alternative minimum tax (“AMT”) credits to claim a refund in 2020 for the entire amount of the credit instead of recovering the credit through refunds over a period of years, as originally enacted by the Tax Cuts and Jobs Act (“TCJA”).

•Payroll tax deferral.

IEA has also made use of the payroll deferral provision to defer the 6.2% social security tax, or approximately $13.6 million, through December 31, 2020. This amount is required to be paid at 50% on December 31, 2021 and December 31, 2022.

~~Amendment to Third A&R~~ Credit Agreement

On ~~October 30, 2020,~~August 17, 2021, Services, as the borrower, and certain guarantors (including the Company), entered into the Credit Agreement. The Credit Agreement provides for a $150 million senior secured revolving credit facility, and is guaranteed by the Company ~~entered into~~and certain subsidiaries of the Company and is secured by a ~~First Amendment to its Third A&R~~security interest in substantially all of their personal property and assets. For a description of the terms and conditions of the Credit Agreement, ~~(the “Amendment”). The Amendment provides for, among other things, an increase~~please see “Note 6 – Debt and Series B Preferred Stock” in the ~~revolving credit commitments previously available by $25.0 million, bringing~~notes to our Condensed Consolidated Financial Statements.

In connection with the ~~aggregate principal amount of~~Senior Unsecured Notes offering, we repaid the ~~revolving credit commitments under~~Term Loan in full and the Third A&R Credit Agreement ~~to $75.0 million, upon the terms and subject to the satisfaction of the conditions set forth in the Third A&R Credit Agreement, as amended by the Amendment.~~

In addition, the Amendment provides that on and after the Amendment’s effective date and until delivery of the financial statements for the fiscal quarter ended December 31, 2020, as required under the Amendment, the percentage ~~per annum~~ interest rate for revolving loans and swing line loans is, at the Company’s option, (x) LIBOR plus a margin of 2.75% or (y) the applicable base rate plus a margin of 1.75%. Thereafter, for any day, the applicable percentage ~~per annum~~ interest rate for revolving loans and swing line loans is LIBOR or the base rate plus a margin depending upon the Company’s first lien net leverage ratio as of the last day of the most recently ended consecutive four fiscal quarter period, as set forth below:

First Lien Net Leverage Ratio LIBOR Loans Base Rate Loans
Less than 1.00:1.00 2.50% 1.50%
Less than 2.00:1.00 but greater than or equal to 1.00:1.00 2.75% 1.75%
Less than 3.00:1.00 but greater than or equal to 2.00:1.00 3.00% 2.00%
Less than 3.50:1.00 but greater than or equal to 3.00:1.00 3.25% 2.25%
Greater than or equal to 3.50:1.00 3.50% 2.50%

The Amendment also further specifies the unused commitment fee rate. On and after the Amendment’s effective date and until delivery of the financial statements for the fiscal quarter ended December 31, 2020, as required under the Amendment, the rate is 0.40% ~~per annum. Thereafter, for any day, the applicable percentage~~ ~~per annum~~ ~~depends upon the Company’s senior secured net leverage ratio, as set forth below:~~


~~Senior Secured Net Leverage Ratio~~			~~Applicable Unused Commitment Fee Rate~~
~~Less than 1.00:1.00~~			~~0.35%~~
~~Less than 2.00:1.00 but greater than or equal to 1.00:1.0~~			~~0.40%~~
~~Less than 3.00:1.00 but greater than or equal to 2.00:1.00~~			~~0.45%~~
~~Greater than or equal to 3.00:1.00~~			~~0.50%~~

was terminated.

Contractual Obligations

The following table sets forth our contractual obligations and commitments for the periods indicated as of ~~June~~September 30, 2021.


		Payments due by period															Payments due by period
(in thousands)	(in thousands)	Total		Remainder of 2021		2022		2023		2024		2025		Thereafter		(in thousands)	Total		Remainder of 2021		2022		2023		2024		2025		Thereafter

Debt (principal) (1)	Debt (principal) (1)	177,613		1,214		16,916		29,986		129,368		129		—		Debt (principal) (1)	304,170		633		1,952		838		442		239		300,066
Debt (interest) (2)	Debt (interest) (2)	34,603		6,161		11,924		10,203		6,312		3		—		Debt (interest) (2)	159,407		185		20,002		19,933		19,901		19,884		79,502
Debt - Series B Preferred Stock (3)		199,474		—		—		—		—		199,474		—
Dividends - Series B Preferred Stock (4)		112,797		13,057		26,113		26,113		26,113		21,401		—

Finance leases ~~(5)~~(3)	Finance leases ~~(5)~~(3)	55,319		13,547		23,379		8,984		5,043		3,555		811		Finance leases ~~(5)~~(3)	56,563		6,846		25,050		11,125		6,951		4,870		1,721
Operating leases ~~(6)~~(4)	Operating leases ~~(6)~~(4)	52,155		6,229		11,238		8,776		4,740		2,236		18,936		Operating leases ~~(6)~~(4)	51,009		3,247		11,983		9,476		5,058		2,285		18,960
Total	Total	$	631,961	$	40,208	$	89,570	$	84,062	$	171,576	$	226,798	$	19,747	Total	$	571,149	$	10,911	$	58,987	$	41,372	$	32,352	$	27,278	$	400,249

(1)Represents the contractual principal payment due dates on our outstanding debt.

(2)~~Includes variable~~Represents interest at the stated rate ~~interest using June 30, 2021 rates.~~of 6.625%.

(3)~~Represents the mandatorily redeemable debt - Series B Preferred with expected redemption date of February 15, 2025.~~

~~(4)Future declared dividends have been included at 12% but payment determination will be evaluated each quarter resulting in differing accumulated dividend rates.~~

~~(5)~~We have obligations, inclusive of associated interest, recognized under various finance leases for equipment totaling ~~$55.3~~$56.6 million at ~~June~~September 30, 2021. Net amounts recognized within property, plant and equipment, net in the condensed consolidated balance sheet under these financed lease agreements at ~~June~~September 30, 2021 totaled ~~$70.1~~$74.7 million.

~~(6)~~(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.

For detailed discussion and additional information pertaining to our debt instruments, see Note 6. Debtand Series B Preferred Stock and Note 7. Commitments and Contingencies in the notes to our condensed consolidated financial statements, included in Part I, 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 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 ~~June~~September 30, 2021 and December 31, 2020, the Company was contingently liable under letters of credit issued under ~~its revolving credit facility or its old~~our credit facility in the amount of ~~$21.7~~$33.7 million and $7.8 million, respectively, related to projects and insurance.

As of ~~June~~September 30, 2021 and December 31, 2020, the Company had outstanding surety bonds on projects with nominal amounts of ~~$3.0~~$3.2 billion and $2.8 billion, respectively. The remaining approximate exposure related to these surety bonds amounted to approximately $400.0 million and $293.1 million, respectively.

Recently Issued Accounting Pronouncements

See Note 1. Business, Basis of Presentation and Summary of Significant Accounting Policies in the notes to our condensed consolidated financial statements, included in Part I, Item 1.

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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 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 lack of concentration and the high credit rating of our customers.

~~Interest Rate Risk~~

Borrowings under the Third A&R Credit Agreement 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 June 30, 2021 was $177.6 million. A one hundred basis point change in the LIBOR rate would increase or decrease interest expense by $1.8 million. As of June 30, 2021, 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 ~~June~~September 30, 2021, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

~~There~~During the quarter ended September 30, 2021, there has been no change in our internal control over financial reporting, ~~during the quarter ended June 30, 2021,~~ that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

3844

Part II. OTHER INFORMATION

Item 1. Legal Proceedings

For information regarding legal proceedings, see Note 7. Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements included in Item 1. Financial Statements of Part I of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

Item 1A. Risk Factors

At ~~June~~September 30, 2021, there have been no other material changes, except as mentioned below, from the risk factors previously disclosed in the Company's Annual Report on Form 10-K filed with the SEC on March 8, 2021, which is accessible on the SEC's website at www.sec.gov, except as described below.

Our Repurchase Program may not enhance long-term value and repurchases, if any, could increase the price and volatility of our warrants and common stock, and diminish our cash reserves.

On November 4, 2021, the Company’s Board of Directors authorized a repurchase program for the Company’s publicly traded warrants to purchase common stock, which trade on the NASDAQ under the symbol IEAWW. This repurchase program allows the Company to purchase up to $25.0 million of warrants, at prevailing prices, in open market or negotiated transactions, subject to market conditions and other considerations, beginning November 11, 2021, and it will end no later than the expiration of the warrants on March 26, 2023. The repurchase program does not obligate the Company to make any repurchases and it may be suspended at any time.

The timing and actual number of warrants repurchased depend on a variety of factors including price, corporate and regulatory requirements, available cash, and other market conditions. Warrant repurchases may not enhance shareholder value, as any warrants repurchased could affect the price of our warrants and common stock, increase their price volatility and could potentially reduce the market liquidity for our warrants and common stock. Additionally, repurchases under this repurchase program will diminish our cash reserves, which impacts our ability to support our operations and pursue possible future opportunities and acquisitions.

Item 5. Other Information

On November 4, 2021, the Company’s Board of Directors authorized a repurchase program for the Company’s publicly traded warrants to purchase common stock, which trade on the NASDAQ under the symbol IEAWW. This repurchase program allows the Company to purchase up to $25.0 million of warrants, at prevailing prices, in open market or negotiated transactions, subject to market conditions and other considerations, beginning November 11, 2021, and it will end no later than the expiration of the warrants on March 26, 2023. This repurchase program does not obligate the Company to make any repurchases and it may be suspended at any time.

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., as amended through May 29, 2020.


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 the Securities Exchange Commission 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 filed 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 of the Company's Current Report on Form 8-K (File No. 001-37796) filed with the Securities Exchange Commission on 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 of 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 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 with the Securities Exchange Commission on August 30, 2019).
3.7						Amended and Restated Certificate of Designation 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 with the Securities Exchange Commission on August 30, 2019).
3.8						Certificate of Designations of Series B-3 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 with the Securities Exchange Commission on November 14, 2019).


3.9						Second Amended and Restated Certificate of Designations of Series B-1 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 with the Securities Exchange Commission on November 14, 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 14, 2019).
4.2						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 March 29, 2018).
4.3						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).
4.4						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).
4.5						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 Current Report on Form 8-K (File No. 001-37796) filed with the Securities Exchange Commission on August 30, 2019).
4.6						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).
4.7						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).


4.8						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).
4.9						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).
4.10						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).
4.11						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).
4.12						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).
4.13						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).


4.14						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 March 4, 2020).
4.15						Warrant Agreement, dated as of March 3, 2020, by and between Infrastructure and Energy Alternatives, Inc. 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 March 4, 2020).
4.16						Form of Indenture for Senior Debt Securities (incorporated by reference to Exhibit 4.20 of the Company's Current Report on Form S-3 (File No. 001-37796) filed December 4, 2020).
4.17						Form of Indenture for Subordinated Debt Securities (incorporated by reference to Exhibit 4.22 of the Company's Current Report on Form S-3 (File No. 001-37796) filed December 4, 2020).
4.18						Form of Warrant Certificate, dated March 23, 2021, by and among Infrastructure and Energy Alternatives, Inc. and each party to the Joinder Agreement to Registration Rights Agreement dated March 23, 2021 (incorporated by reference to Exhibit 4.27 to the Company's Registration Statement on Form S-3 (File No. 333-255097) filed on April 7, 2021).
~~10.1†~~4.19						Pre-Funded Warrant, dated as of August 2, 2021, issued by Infrastructure and Energy Alternatives, Inc. ~~2018 Equity Incentive Plan (as amended and restated as of May 13, 2021)~~to ASOF Holdings I, L.P (incorporated by reference to Exhibit ~~10.1 of~~10.3 to the Company’s Current Report on Form 8-K (File No. 001-37796) filed ~~May 14,~~on August 2, 2021).
~~10.2~~4.20†						~~Infrastructure~~Indenture, dated as of August 17, 2021, by and among IEA Energy ~~Alternative, Inc. 2021 Employee Stock Purchase Plan~~Services LLC, the guarantors party thereto from time to time and Wilmington Trust National Association, as trustee, governing the 6.625% Senior Notes due 2029 (incorporated by reference to Exhibit ~~10.1 of~~4.1 to the Company’s Current Report on Form 8-K (File No. 001-37796) filed ~~May 14,~~on August 17, 2021).
~~10.3†~~4.21						~~Employment Agreement, dated~~Form of 6.625% Senior Note due 2029 (included as ~~of June 29, 2021, between IEA Energy Services, LLC and Erin Roth.~~Exhibit A to Exhibit 4.20) (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 001-37796) filed on August 17, 2021).
~~10.4~~4.22*†						~~Separation Agreement and General Release,~~Pre-Funded Warrant (Balance of Warrant Shares), dated ~~July 15,~~as of August 2, 2021, issued by ~~and between~~ Infrastructure and Energy Alternatives, Inc. to ASOF Holdings I, L.P.


10.1						Transaction Agreement between the Company and ~~Gil Melman.~~the Ares Parties, dated as of July 28, 2021 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-37796) filed July 28, 2021).
10.2						Stockholders’ Agreement, dated as of August 2, 2021, by and among Infrastructure and Energy Alternatives, Inc., Ares Special Situations Fund IV, L.P. and ASOF Holdings I, L.P (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-37796) filed on August 2, 2021).
10.3						Sixth Amendment to Amended and Restated Registration Rights Agreement, dated of as of August 2, 2021, by and among Infrastructure and Energy Alternatives, Inc., Ares Special Situations Fund IV, L.P. and ASOF Holdings I, L.P (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 001-37796) filed on August 2, 2021).
10.4#						Credit Agreement, dated as of August 17, 2021, by and among IEA Energy Services LLC, the guarantors party thereto from time to time, the lenders party thereto from time to time and CIBC Bank USA, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-37796) filed on August 17, 2021).
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
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.INS)

*Filed herewith.

**Furnished herewith

† Indicates a management contract or compensatory plan or arrangement.

# Schedules have been omitted pursuant to Item ~~601(b)~~601(a)(5) of Regulation S-K. We will furnish the omitted schedules to the Securities and Exchange Commission upon request by the Commission.

4249

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: ~~July 28,~~November 8, 2021	By:	/s/ Peter J. Moerbeek
	Name: Peter J. Moerbeek
	Title: Executive Vice President, Chief Financial Officer
		Principal Financial and Accounting Officer


First Lien Net Leverage Ratio	LIBOR Loans	Base Rate Loans
Less than 1.00:1.00	2.50%	1.50%
Less than 2.00:1.00 but greater than or equal to 1.00:1.00	2.75%	1.75%
Less than 3.00:1.00 but greater than or equal to 2.00:1.00	3.00%	2.00%
Less than 3.50:1.00 but greater than or equal to 3.00:1.00	3.25%	2.25%
Greater than or equal to 3.50:1.00	3.50%	2.50%