Enservco shares fall 8% after plans to restate some 2021 financials

By Chris Wack


Shares of Enservco Corp. fell 8% to $3.38 after the company announced it would restate its financials on three Form 10-Q filings starting in 2021.

The company said the changes are not related to operational matters and will not affect its reported revenues, operating expenses, operating loss or adjusted earnings before interest, taxes, depreciation and amortization.

Enservco said the restatements were necessary because its auditors believe the company was not eligible for the full amount of employee retention tax credits it registered under the CARES Act, and that it erred in accounting for the issue of a mandate in connection with the February 2021 conversion of subordinated debt into equity.

The company said it claimed the employee retention tax credits based on the advice of third-party experts at the time and further on management’s understanding of the CARES Act, the rules of which have then clarified.

Enservco also announced Monday that it has withdrawn its $13.8 million senior revolving credit facility with East West Bank for total consideration of $9.4 million, which includes an upfront cash payment of $8.4 million. and future payments of up to $1 million on a limited portion of the net proceeds. from receivables financing.

As a result of the refinancing, Enservco’s debt was reduced and primarily reclassified as long-term liabilities with terms of four to six years.

Enservco said it intends to extend the filing date for its 2021 Form 10-K by up to 15 days to accommodate restatements and successful debt refinancing transactions.


Write to Chris Wack at [email protected]

Julio V. Miller