Enservco Corporation Provides 2025 Q1 Update

Rhea-AI Summary

Enservco (ENSV) announced several significant operational changes and challenges in Q1 2025. The company completed the sale of its subsidiary Buckshot Trucking on April 1, 2025, resulting in the cancellation of $2.7M in promissory notes. Through its subsidiary Heat Waves, Enservco refinanced its Utica debt, reducing monthly payments from $168,075 to $78,165 through September 2029.

The company also settled its Libertas Funding debt, decreasing monthly payments by $92,000. However, Enservco faces significant challenges as it failed to file its Form 10-K for fiscal year 2024 and has not engaged auditors for financial statements. The company received notice that its stock will likely be delisted from OTCQB if compliance is not achieved by May 15, 2025.

Positive

• Monthly debt payments reduced by $181,910 through Utica refinancing and Libertas debt settlement
• Elimination of $2.7M in promissory notes through Buckshot Trucking sale
• Release from Pathward and Libertas guarantor obligations

Negative

• Failure to file Form 10-K for fiscal year 2024
• Probable delisting from OTCQB by May 15, 2025
• Suspension of SEC reporting to preserve cash flow
• No current engagement of independent auditors

Sells Buckshot Trucking Line

Refinances Outstanding Utica Equipment Debt

Retires Libertas Factoring Loan

Announces Reporting Delays and Expected OTC Delisting

LONGMONT, COLORADO / ACCESS Newswire / April 22, 2025 / Enservco Corporation, a diversified national provider of specialized well-site services to the domestic onshore conventional and unconventional oil and gas industries ("Enservco" or the "Company") provided an update today with respect the following transactions to restructuring the Company's operations and debt service and with respect to its SEC filings and probable OTC delisting. Enservco believes that these two transactions are critical to the Company restructuring and optimization of its operations.

Sale of Buckshot Trucking LLC

On April 1, 2025, Enservco completed the sale of its wholly-owned subsidiary, Buckshot Trucking LLC, by assigning 100% of its membership interests to the previous owners.

Under the Membership Interest Purchase Agreement, promissory notes issued to the sellers in the amounts of $2,025,000 and $675,000, due December 31, 2024, were canceled, and mutual releases were executed. Prior to the sale, Buckshot refinanced obligations with Pathward, National Association, and Libertas Funding, LLC, releasing Enservco from all related guarantor obligations.

Refinancing of Utica Debt; Repayment of Libertas Debt

Heat Waves Hot Oil Service, LLC, a wholly-owned Enservco subsidiary, entered into an Amended and Restated Master Lease Agreement with Utica Leaseco, LLC, for a $2,895,000 lease facility. This agreement replaces the original $6,225,000 Master Lease Agreement from March 22, 2022, reducing monthly payments from $168,075 to $78,165, effective May 2025 through September 2029. The new facility includes a $289,500 end-of-term payment due in September 2029 or upon default. Heat Waves may prepay after 16 months with a 7% penalty on the unamortized balance (plus the end-of-term payment), decreasing to 4% after 24 months. The facility is secured by Heat Waves' equipment, with Enservco providing an amended guaranty.

As part of this refinancing, Enservco settled and terminated its Agreement of Sale of Future Receipts with Libertas Funding, LLC, dated August 13, 2024, along with the associated guaranty. This further reduced interest and principal payments by $92,000 a month.

Rich Murphy, Chair and CEO of Enservco, stated, "Restructuring our Utica debt and eliminating the Libertas debt significantly reduces our monthly financial burden, marking a critical step in strengthening our balance sheet.

Rich Murphy added "As we streamline our oilfield services operations and optimize our debt structure, we determined that the Buckshot Trucking acquisition did not align with our long-term strategic goals. We successfully unwound the transaction, except for the Enservco equity retained by the buyers, and we extend our best wishes to Tony Sims and Jim Fate for their future endeavors. With these actions, Enservco becomes more focused on its hot oiling business that is far less seasonal with a capital structure more appropriate for the business."

SEC Reporting Obligations

The Company did not file its Form 10-K for the fiscal year ended December 31, 2024 in an effort to save costs and preserve cash flow. While the Company presently intends to eventually come into compliance with its SEC reporting obligations, it has not yet re-engaged its independent public accounting firm to complete the audited financial statements for 2024. Until any such filing is made, the Company will not be filing reports with the SEC (be they Form 10-S, Form 8-Ks or otherwise).The Company intends to provide financial and news updates to the market in the future.

OTCQB Listing

Because the Company had not filed its Form 10-K that was due March 31, 2025, the Company was notified by the OTCQB on April 1, 2025 that the Company's common stock will no longer be quoted on such marketplace if the Company does not file such Form 10-K by May 15, 2025. Given that the Company has not yet engaged its auditor for such audit, it is not expected to regain compliance by such time and be quoted on the OTCQB.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This news release contains information that is "forward-looking" in that it describes events and conditions Enservco reasonably expects to occur in the future. Expectations for the future performance of Enservco are dependent upon a number of factors, and there can be no assurance that Enservco will achieve the results as contemplated herein. Certain statements denoting future possibilities, are forward-looking statements. The accuracy of these statements cannot be guaranteed as they are subject to a variety of risks, which are beyond Enservco's ability to predict, or control and which may cause actual results to differ materially from the projections or estimates contained herein. Among these risks are those set forth in Enservco's annual report on Form 10-K for the year ended December 31, 2023, and subsequently filed documents with the Securities and Exchange Commission ("SEC"). Forward looking statements in this news release that are subject to risks related to, among other things, the ability of the Company to file its Form 10-K for year ended December 31, 2024 and subsequent SEC reports; the ability of the Company to restructure and organize its business such that Company becomes profitable; the Company's ability to provide financial and news updates to the market in the future, and the ability of the Company to survive as an operating entity. Enservco disclaims any obligation to update any forward-looking statement made herein.

Contact Information

Richard Murphy
914.393.9848
rmurphy@enservco.com

SOURCE: Enservco Corporation

View the original press release on ACCESS Newswire

FAQ

What are the financial implications of Enservco's (ENSV) debt restructuring in 2025?

The restructuring reduced monthly payments on Utica debt from $168,075 to $78,165 and eliminated Libertas debt payments of $92,000 monthly, significantly lowering the company's financial obligations.

Why is Enservco (ENSV) facing delisting from OTCQB in May 2025?

Enservco faces delisting due to failing to file its Form 10-K for fiscal year 2024 by March 31, 2025, and must comply by May 15, 2025, to maintain OTCQB listing.

What was the value of promissory notes canceled in Enservco's Buckshot Trucking sale?

The sale resulted in cancellation of two promissory notes totaling $2.7 million ($2,025,000 and $675,000) that were due December 31, 2024.

What are the terms of Enservco's new Utica lease facility in 2025?

The new $2.895M lease facility runs through September 2029 with $78,165 monthly payments and includes a $289,500 end-of-term payment, with prepayment options after 16 months.