ensv20230630

ensv20230630_10q.htm

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 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number 001-36335

ENSERVCO CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		84-0811316
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

14133 Country Road 9 1/2 Longmont, CO		80504
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number: (303) 333-3678

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

Title of each class		Trading Symbol(s)		Name of exchange on which registered
Common stock		ENSV		NYSE American

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 for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 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 files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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, indicated 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 Exchange Act). Yes ☐ No ☒

As of August 8, 2023 there were 22,940,510 shares of common stock, par value $0.005 per share, issued and outstanding.

Table of Contents

TABLE OF CONTENTS

	Page
Part I – Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets	3
Condensed Consolidated Statements of Operations	4
Condensed Consolidated Statements of Stockholders' Equity	5
Condensed Consolidated Statements of Cash Flows	6
Notes to the Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3. Quantitative and Qualitative Disclosures about Market Risk	27
Item 4. Controls and Procedures	27

Part II
Item 1. Legal Proceedings	28
Item 1A. Risk Factors	28
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3. Defaults Upon Senior Securities	28
Item 4. Mine Safety Disclosures	28
Item 5. Other Information	28
Item 6. Exhibits	29

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ENSERVCO CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

	June 30, 2023			December 31, 2022
	(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	431		$	35
Accounts receivable, net		1,312			4,463
Prepaid expenses and other current assets		1,997			989
Inventories		347			320
Note receivable		75			75
Assets held for sale		78			78
Total Current Assets		4,240			5,960

Property and equipment, net		9,185			11,236
Goodwill		546			546
Intangible assets, net		73			182
Note receivable, less current portion		181			225
Right-of-use asset - finance, net		15			22
Right-of-use asset - operating, net		1,166			1,476
Other assets		187			191

Total Assets	$	15,593		$	19,838

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities	$	4,248		$	4,868
Utica Facility		1,354			1,250
LSQ Facility		792			2,945
Current portion of March 2022 Convertible Note, related party		-			100
Current portion of July 2022 Convertible Note, related party		-			60
Lease liability - finance		14			13
Lease liability - operating		556			597
Current portion of long-term debt		24			54
Other current liabilities		-			354
Total Current Liabilities		6,988			10,241

Utica Facility, less current portion		3,286			3,963
March 2022 Convertible Note, related party, net of current portion		-			1,100
July 2022 Convertible Note, related party, net of current portion		-			1,140
November 2022 Convertible Note, related party		923			818
Utica Residual Liability		183			110
Lease liability - finance, less current portion		1			11
Lease liability - operating, less current portion		707			991
Deferred tax liabilities		257			273
Other non-current liabilities		20			22

Total Liabilities		12,365			18,669

Commitments and Contingencies

Stockholders' Equity:
Preferred stock, $0.005 par value, 10,000,000 shares authorized, no shares issued or outstanding		-			-
Common stock, $0.005 par value, 100,000,000 shares authorized; 21,447,417 and 11,835,753 shares issued as of June 30, 2023 and December 31, 2022, respectively; 6,907 shares of treasury stock as of June 30, 2023 and December 31, 2022, respectively; and 21,440,510 and 11,828,846 shares outstanding as of June 30, 2023 and December 31, 2022, respectively		107			59
Additional paid-in capital		47,835			42,266
Accumulated deficit		(44,714	)		(41,156	)
Total Stockholders' Equity		3,228			1,169

Total Liabilities and Stockholders' Equity	$	15,593		$	19,838

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

ENSERVCO CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
Revenues:
Production services	$	2,889		$	3,110		$	5,752		$	5,857
Completion and other services		840			340			6,889			6,176
Total revenues		3,729			3,450			12,641			12,033

Expenses:
Production services		2,601			2,793			4,775			5,377
Completion and other services		1,315			1,124			6,038			5,834
Sales, general, and administrative expenses		882			1,558			2,385			2,669
Severance and transition costs		-			299			1			299
(Gain) loss on disposal of assets		(175	)		130			(175	)		165
Impairment loss		250			-			250			-
Depreciation and amortization		945			1,105			1,916			2,248
Total operating expenses		5,818			7,009			15,190			16,592

Loss from operations		(2,089	)		(3,559	)		(2,549	)		(4,559	)

Other (expense) income:
Interest expense		(518	)		(433	)		(1,108	)		(605)
Gain on debt extinguishment		-			-			-			4,277
Other income		53			57			83			92
Total other (expense) income, net		(465	)		(376)			(1,025	)		3,764

Loss before taxes		(2,554	)		(3,935	)		(3,574	)		(795	)
Deferred income tax benefit		-			-			16			-
Net loss	$	(2,554	)	$	(3,935	)	$	(3,558	)	$	(795	)

Net loss per share - basic and diluted	$	(0.14	)	$	(0.34	)	$	(0.22	)	$	(0.07	)

Weighted average number of common shares outstanding - basic and diluted		18,624			11,494			16,428			11,473

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

SEC Form 10-Q filed by Enservco Corporation