Denver-based Enservco Corporation announced Monday that it will restate its financial statements on three Form 10-Q filings from 2021. The amendments are not related to operating matters and will not affect the Company’s reported revenue, operating expenses, operating loss, or adjusted EBITDA. In addition, the Company intends to extend the filing date of its 2021 Form 10-K for up to 15 days to incorporate the restatements and the successful debt refinancing transactions announced today.
“The restatements were required for two reasons: First, our auditors believe that the Company was not eligible for the full amount of employee retention tax credits that we recorded pursuant to the CARES Act; and second, the Company erred in accounting for a warrant issuance in connection with the February 2021 conversion of subordinated debt to equity,” said Rich Murphy, Chairman and CEO. “It’s important to note that these restatements are not related to operating matters and do not impact revenue, operating expenses, operating loss or adjusted EBITDA. We expect to file three amended Form 10-Qs and our 2021 Form 10-K as soon practicable.”
The Company said it applied for the employee retention tax credits based on third-party expert advice at the time and further based on management’s understanding of the CARES Act, the rules for which were subsequently clarified.
“The pending amendments did not impact the successful refinancing that we also announced today that substantially reduced our total debt, converted the majority of our debt from current to long-term liabilities and provided increased working capital liquidity. This refinancing strengthens and stabilizes our balance sheet and increases our financial flexibility,” added Murphy.
Through its various operating subsidiaries, Enservco provides a wide range of oilfield services, including hot oiling, acidizing, frac water heating and related services. The Company has a broad geographic footprint covering seven major domestic oil and gas basins and serves customers in Colorado, Montana, New Mexico, North Dakota, Oklahoma, Pennsylvania, Ohio, Texas, Wyoming and West Virginia.