Enservco(ENSV) - 2024 Q3 - Quarterly Report

Financial Performance - Adjusted EBITDA loss for the three months ended September 30, 2024 improved by $432,000, or 31%, compared to the same period in 2023[36] - Hot oiling revenues for the three months ended September 30, 2024 decreased by $221,000, or 9%, compared to the same period in 2023[44] - Segment profit for Logistics Services for the three months ended September 30, 2024 was $790,000, accounting for 42% of total revenues[46] - Sales, general, and administrative expenses for the three months ended September 30, 2024 increased by $785,000, or 80%, compared to the same period in 2023[48] - Depreciation and amortization expense for the three months ended September 30, 2024 decreased by $407,000, or 48%, compared to the same period in 2023[49] - Net loss reported for the period is $(2,327,000)[61] - For the three months ended September 30, 2024, the net loss from continuing operations was $5.8 million, compared to a net loss of $5.5 million for the same period in 2023[82] Assets and Liabilities - Total current assets as of September 30, 2024 were $7,898,000, an increase from $5,722,000 as of December 31, 2023[55] - Total assets as of September 30, 2024 were $18,470,000, compared to $13,872,000 as of December 31, 2023[55] - Total current liabilities as of September 30, 2024 were $13,483,000, an increase from $10,028,000 as of December 31, 2023[55] - Total Stockholders' Equity (Deficit) as of January 1, 2023 is $1,169,000[59] - Total Stockholders' Equity (Deficit) as of June 30, 2024 is $1,497,000[61] - Accumulated Deficit as of March 31, 2023 is $(42,160,000)[72] - Additional Paid-in Capital as of January 1, 2024 is $48,970,000[73] - Total Liabilities and Stockholders' Equity as of January 1, 2024 is $18,470,000[68] - The company has a working capital deficit of $5.4 million as of September 30, 2024[82] Cash Flow and Financing - The Company entered into a Credit and Security Agreement for a $3.5 million Revolving Loan Facility on October 23, 2024[40] - The Company may not be able to meet its capital requirements in the near term without additional borrowings or capital infusions[41] - Cash and cash equivalents at the end of the period were $172,000, down from $300,000 at the end of September 30, 2023[77] - Cash paid for interest was $734,000 for the three months ended September 30, 2024, compared to $1.4 million for the same period in 2023[77] - The company generated net cash provided by operating activities from discontinued operations of $4.68 million for the three months ended September 30, 2024, compared to $2.17 million for the same period in 2023[76] - The company utilized a cash forecast model to evaluate future cash flows and indicated the need to raise additional capital for growth and ongoing operations[83] - The company discontinued utilizing the equity line of credit in the third quarter of 2024 due to downward pressure on the stock price[83] Acquisitions and Impairments - The company closed on the acquisition of Buckshot, a provider of logistics and transportation services, for $656,000 during the third quarter of 2024[82] - The company recorded impairment charges of $596,000 on assets held for sale for the three months ended September 30, 2024, compared to no impairment charges for the same period in 2023[94] - For the nine months ended September 30, 2024, the company recorded impairment charges of $250,000 on assets held for sale as part of discontinued operations[94] - The company may face challenges in realizing the anticipated benefits of the Buckshot acquisition due to integration costs and operational difficulties[332] Shareholder and Equity Information - Common shares issued through the release of OilServ, LLC indemnification provisions total 294 shares[73] - Stock-based compensation expense for the period is $76,000[73] - Common shares issued in connection with the conversion of certain September and October 2023 Convertible Notes total 184 shares[74] - Common shares issued through Keystone equity line total 4,400 shares[74] - The company agreed to pay a total of $759,353 to Note Holders as part of a Settlement Agreement, which includes $625,000 of principal, $99,479 of interest, and $34,874 of attorneys' fees, due on or before January 15, 2025[331] Operational Challenges - The company operates in a highly competitive logistics industry, which could impact its profitability and growth prospects[334] - Increased equipment prices and supply chain disruptions could adversely affect the company's results of operations and cash flows[335] - The company is focused on controlling general and administrative expenses, including wages, benefits, and insurance, to navigate seasonal demand swings[345] - The company is undertaking initiatives to improve its internal control environment, including upgrading its ERP and accounting system[350] - The company has identified material weaknesses in its internal control over financial reporting, which are being remediated[350]