falsedesktopAETI2020-09-30000104318620000067{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "Large accelerated filer\t☐\tAccelerated filer\t☐\nNon-accelerated filer\t☒\tSmaller reporting company\t☒\n\t\tEmerging growth company\t☐\n", "q10k_tbl_1": "\t\tPage\n\tPart I. Financial Information\t\nItem 1.\tFinancial Statements (Unaudited)\t\n\tCondensed Consolidated Balance Sheets\t5\n\tCondensed Consolidated Statements of Operations\t6\n\tCondensed Consolidated Statements of Comprehensive Loss\t7\n\tCondensed Consolidated Statements of Stockholders' Equity\t8\n\tCondensed Consolidated Statements of Cash Flows\t9\n\tNotes to Condensed Consolidated Financial Statements\t10\nItem 2.\tManagement's Discussion and Analysis of Financial Condition and Results of Operations\t23\nItem 4.\tControls and Procedures\t38\n\tPart II. Other Information\t\nItem 1.\tLegal Proceedings\t39\nItem 1A.\tRisk Factors\t39\nItem 5.\tOther Information\t39\nItem 6.\tExhibits\t40\nSignatures\t\t43\n", "q10k_tbl_2": "\tSeptember 30 2020\tDecember 31 2019\nAssets\t\t\nCurrent assets:\t\t\nCash and cash equivalents\t3410\t3979\nAccounts receivable net\t1993\t5945\nInventories net\t161\t209\nPrepaid expenses and other current assets\t3712\t3583\nTotal current assets\t9276\t13716\nProperty plant and equipment net\t53852\t60363\nRight-of-use assets\t881\t965\nGoodwill\t4453\t4453\nInvestments in foreign joint ventures\t10316\t10521\nOther noncurrent assets\t306\t308\nTotal assets\t79084\t90326\nLiabilities and Equity\t\t\nCurrent liabilities:\t\t\nCurrent portion of long-term notes payable\t447\t0\nCurrent portion of long-term notes payable - related parties\t2737\t1000\nCurrent portion of finance lease obligation - related parties\t1312\t3440\nCurrent portion of operating lease obligations\t383\t364\nShort-term notes payable\t744\t558\nAccrued liabilities\t4116\t5018\nAccounts payable\t3273\t4728\nTotal current liabilities\t13012\t15108\nLong-term notes payable net of current portion\t633\t0\nLong-term notes payable net of current portion - related parties\t3340\t6077\nFinance lease obligations net of current portion - related parties\t0\t648\nLong-term portion of operating lease obligations\t565\t650\nDeferred compensation\t72\t0\nDeferred income taxes\t32\t0\nTotal liabilities\t17654\t22483\nCommitments and contingencies (Note 14)\t\t\nStockholders' Equity:\t\t\nPreferred Stock; $0.001 par value 1000000 shares authorized no shares issued and outstanding at September 30 2020 and December 31 2019 respectively\t0\t0\nCommon stock; $0.001 par value 37500000 shares authorized 16896626 and 16800612 shares issued and outstanding at September 30 2020 and December 31 2019 respectively (Note 14)\t17\t17\nAdditional paid-in capital\t91092\t90748\nAccumulated other comprehensive loss\t(402)\t(291)\nAccumulated deficit\t(29277)\t(22631)\nTotal stockholders' equity\t61430\t67843\nTotal liabilities and equity\t79084\t90326\n", "q10k_tbl_3": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nRevenue\t\t\t\t\nLNG product\t6594\t7919\t18609\t26872\nRental service and other\t1073\t1224\t5613\t6341\nPower delivery\t1352\t1371\t3638\t1371\nTotal revenues\t9019\t10514\t27860\t34584\nOperating expenses:\t\t\t\t\nCosts of LNG product\t5044\t5441\t13692\t19051\nCosts of rental service and other\t808\t1095\t3381\t3538\nCosts of power delivery\t996\t1144\t3131\t1144\nSelling general and administrative expenses\t2338\t3781\t7892\t8139\nDepreciation expense\t2266\t2307\t6802\t6892\nTotal operating expenses\t11452\t13768\t34898\t38764\nLoss from operations before equity income\t(2433)\t(3254)\t(7038)\t(4180)\nNet equity income from foreign joint ventures' operations:\t\t\t\t\nIncome from equity investments in foreign joint ventures\t642\t187\t1529\t187\nForeign joint ventures' operations related expenses\t(69)\t(52)\t(182)\t(52)\nNet equity income from foreign joint ventures' operations\t573\t135\t1347\t135\nLoss from operations\t(1860)\t(3119)\t(5691)\t(4045)\nOther income (expense):\t\t\t\t\nInterest expense net\t(2)\t(33)\t(28)\t(37)\nInterest expense net - related parties\t(199)\t(306)\t(681)\t(910)\nOther income (expense)\t(31)\t124\t(6)\t61\nGain from disposal of fixed assets\t0\t17\t11\t17\nTotal other income (expense)\t(232)\t(198)\t(704)\t(869)\nLoss before income tax expense\t(2092)\t(3317)\t(6395)\t(4914)\nIncome tax expense\t41\t38\t251\t38\nNet loss\t(2133)\t(3355)\t(6646)\t(4952)\nNet income attributable to noncontrolling interests\t0\t0\t0\t207\nNet loss attributable to Stabilis Solutions Inc.\t(2133)\t(3355)\t(6646)\t(5159)\nCommon Stock Data:\t\t\t\t\nNet loss per common share:\t\t\t\t\nBasic and diluted\t(0.13)\t(0.22)\t(0.39)\t(0.37)\nWeighted average number of common shares outstanding:\t\t\t\t\nBasic and diluted\t16896626\t15070733\t16867939\t13816341\n", "q10k_tbl_4": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nNet loss\t(2133)\t(3355)\t(6646)\t(4952)\nForeign currency translation adjustment\t424\t(530)\t(111)\t(530)\nTotal comprehensive loss\t(1709)\t(3885)\t(6757)\t(5482)\nTotal comprehensive income attributable to noncontrolling interest\t0\t0\t0\t207\nTotal comprehensive loss attributable to Stabilis Solutions Inc.\t(1709)\t(3885)\t(6757)\t(5689)\n", "q10k_tbl_5": "\tCommon Stock\t\t\t\t\t\t\n\t\tShares\tAmount\tAdditional Paid-in Capital\tAccumulated Other Comprehensive Income (Loss)\tAccumulated Deficit\tNon-controlling Interest\t\t\t\tTotal\t\t\nBalance at December 31 2019\t\t16800612\t17\t90748\t(291)\t(22631)\t0\t\t\t\t67843\t\t\nCommon stock issued\t\t34706\t0\t0\t0\t0\t0\t\t\t\t0\t\t\nStock-based compensation\t\t0\t0\t19\t0\t0\t0\t\t\t\t19\t\t\nNet loss\t\t0\t0\t0\t0\t(1050)\t0\t\t\t\t(1050)\t\t\nOther comprehensive loss\t\t0\t0\t0\t(619)\t0\t0\t\t\t\t(619)\t\t\nBalance at March 31 2020\t\t16835318\t17\t90767\t(910)\t(23681)\t0\t\t\t\t66193\t\t\nCommon stock issued\t\t61308\t0\t0\t0\t0\t0\t\t\t\t0\t\t\nStock-based compensation\t\t0\t0\t139\t0\t0\t0\t\t\t\t139\t\t\nNet loss\t\t0\t0\t0\t0\t(3463)\t0\t\t\t\t(3463)\t\t\nOther comprehensive income\t\t0\t0\t0\t84\t0\t0\t\t\t\t84\t\t\nBalance at June 30 2020\t\t16896626\t17\t90906\t(826)\t(27144)\t0\t\t\t\t62953\t\t\nCommon stock issued\t\t0\t0\t0\t0\t0\t0\t\t\t\t0\t\t\nStock-based compensation\t\t0\t0\t186\t0\t0\t0\t\t\t\t186\t\t\nNet loss\t\t0\t0\t0\t0\t(2133)\t0\t\t\t\t(2133)\t\t\nOther comprehensive income\t\t0\t0\t0\t424\t0\t0\t\t\t\t424\t\t\nBalance at September 30 2020\t\t16896626\t17\t91092\t(402)\t(29277)\t0\t\t\t\t61430\t\t\n", "q10k_tbl_6": "\tCommon Stock\t\t\t\t\t\t\n\t\tShares\tAmount\tAdditional Paid-in Capital\tAccumulated Other Comprehensive Loss\tAccumulated Deficit\tNon-controlling Interest\t\t\t\tTotal\t\t\nBalance at December 31 2018\t\t13178750\t13\t68244\t0\t(16916)\t1323\t\t\t\t52664\t\t\nNet loss\t\t0\t0\t0\t0\t(738)\t179\t\t\t\t(559)\t\t\nBalance at March 31 2019\t\t13178750\t13\t68244\t0\t(17654)\t1502\t\t\t\t52105\t\t\nNet loss\t\t0\t0\t0\t0\t(1066)\t28\t\t\t\t(1038)\t\t\nBalance at June 30 2019\t\t13178750\t13\t68244\t0\t(18720)\t1530\t\t\t\t51067\t\t\nRecapitalization due to reverse merger\t\t1466092\t1\t12618\t0\t0\t(1530)\t\t\t\t11089\t\t\nShares issued in extinguishment of debt\t\t1470807\t2\t6887\t0\t0\t0\t\t\t\t6889\t\t\nShares issued in acquisition of Diversenergy\t\t684963\t1\t2999\t0\t0\t0\t\t\t\t3000\t\t\nNet loss\t\t0\t0\t0\t0\t(3355)\t0\t\t\t\t(3355)\t\t\nOther comprehensive loss\t\t0\t0\t0\t(530)\t0\t0\t\t\t\t(530)\t\t\nBalance at September 30 2019\t\t16800612\t17\t90748\t(530)\t(22075)\t0\t\t\t\t68160\t\t\n", "q10k_tbl_7": "\tNine Months Ended September 30\t\n\t2020\t2019\nCash flows from operating activities:\t\t\nNet loss\t(6646)\t(4952)\nAdjustments to reconcile net loss to net cash provided by operating activities:\t\t\nDepreciation and amortization\t6802\t6892\nDeferred income tax expense\t41\t0\nStock-based compensation expense\t344\t0\nBad debt expense\t144\t147\nGain on disposal of fixed assets\t(11)\t(17)\nGain on extinguishment of debt\t0\t(116)\nIncome from equity investment in joint venture\t(1529)\t(187)\nDistributions from equity investment in joint venture\t2054\t0\nDeferred compensation costs\t72\t0\nChange in operating assets and liabilities net of acquisitions:\t\t\nAccounts receivable\t3629\t1823\nDue to (from) related parties\t0\t113\nInventories\t48\t67\nPrepaid expenses and other current assets\t(396)\t(1184)\nAccounts payable and accrued liabilities\t(2085)\t1117\nOther\t0\t18\nNet cash provided by operating activities\t2467\t3721\nCash flows from investing activities:\t\t\nAcquisition of fixed assets\t(327)\t(2103)\nProceeds on sales of fixed assets\t12\t125\nAcquisition of American Electric net of cash received\t0\t(1876)\nAcquisition of Diversenergy net of cash received\t0\t611\nNet cash used in investing activities\t(315)\t(3243)\nCash flows from financing activities:\t\t\nProceeds on long-term borrowings\t1080\t0\nProceeds on long-term borrowings from related parties\t0\t5000\nPayments on long-term borrowings from related parties\t(3776)\t(2582)\nProceeds from short-term notes payable\t776\t767\nPayments on short-term notes payable\t(644)\t(394)\nNet cash provided by (used in) financing activities\t(2564)\t2791\nEffect of exchange rate changes on cash\t(157)\t0\nNet increase (decrease) in cash and cash equivalents\t(569)\t3269\nCash and cash equivalents beginning of period\t3979\t1247\nCash and cash equivalents end of period\t3410\t4516\nSupplemental disclosure of cash flow information:\t\t\nInterest paid\t834\t1108\nIncome taxes paid\t210\t0\nNon-cash investing and financing activities:\t\t\nExtinguishment of long-term debt through issuance of common stock\t0\t7000\n", "q10k_tbl_8": "\tThree Months Ended September 30\tNine Months Ended September 30\n\t2019\t2019\nRevenue\t11302\t38543\nNet loss\t(4402)\t(5846)\n", "q10k_tbl_9": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nLNG Product\t6594\t7919\t18609\t26872\nRental\t737\t759\t4012\t4340\nService\t187\t7\t593\t689\nPower Delivery\t1352\t1371\t3638\t1371\nOther\t149\t458\t1008\t1312\n\t9019\t10514\t27860\t34584\n", "q10k_tbl_10": "\tSeptember 30 2020\tDecember 31 2019\nBalance at beginning of period\t185\t93\nCash received excluding amounts recognized as revenue\t694\t185\nAmounts recognized as revenue\t(477)\t(93)\nBalance at end of period\t402\t185\n", "q10k_tbl_11": "\tThree Months Ended September 30 2020\t\t\tNine Months Ended September 30 2020\t\t\n\t(in thousands)\t\t\t(in thousands)\t\t\n\tLNG\tPower Delivery\tTotal\tLNG\tPower Delivery\tTotal\nRevenues\t7667\t1352\t9019\t24222\t3638\t27860\nDepreciation\t2237\t29\t2266\t6706\t96\t6802\nLoss from operations before equity income\t(2179)\t(254)\t(2433)\t(5909)\t(1129)\t(7038)\nNet equity income from foreign joint ventures' operations\t0\t573\t573\t0\t1347\t1347\nIncome (loss) from operations\t(2179)\t319\t(1860)\t(5909)\t218\t(5691)\nNet income (loss)\t(2458)\t325\t(2133)\t(6678)\t32\t(6646)\n", "q10k_tbl_12": "\tSeptember 30 2020\t\t\n\t\t(in thousands)\t\n\tLNG\tPower Delivery\tTotal\nTotal assets\t65582\t13502\t79084\n", "q10k_tbl_13": "\tThree Months Ended September 30 2019\t\t\tNine Months Ended September 30 2019\t\t\n\t(in thousands)\t\t\t(in thousands)\t\t\n\tLNG\tPower Delivery\tTotal\tLNG\tPower Delivery\tTotal\nRevenues\t9143\t1371\t10514\t33213\t1371\t34584\nDepreciation\t2277\t30\t2307\t6862\t30\t6892\nLoss from operations before equity income\t(2988)\t(266)\t(3254)\t(3914)\t(266)\t(4180)\nNet equity income from foreign joint ventures' operations\t0\t135\t135\t0\t135\t135\nIncome (loss) from operations\t(2988)\t(131)\t(3119)\t(3914)\t(131)\t(4045)\nNet loss\t(3209)\t(146)\t(3355)\t(4806)\t(146)\t(4952)\n", "q10k_tbl_14": "\tDecember 31 2019\t\t\n\t\t(in thousands)\t\n\tLNG\tPower Delivery\tTotal\nTotal assets\t75883\t14443\t90326\n", "q10k_tbl_15": "\tSeptember 30 2020\tDecember 31 2019\nPrepaid LNG\t55\t189\nPrepaid insurance\t967\t698\nPrepaid supplier expenses\t295\t229\nOther receivables\t2046\t1655\nDeposits\t192\t347\nOther\t157\t465\nTotal prepaid expenses and other current assets\t3712\t3583\n", "q10k_tbl_16": "\tSeptember 30 2020\tDecember 31 2019\nLiquefaction plants and systems\t40830\t40617\nReal property and buildings\t1603\t1794\nVehicles and tanker trailers and equipment\t46904\t46597\nComputer and office equipment\t506\t453\nConstruction in progress\t174\t409\nLeasehold improvements\t30\t31\n\t90047\t89901\nLess: accumulated depreciation\t(36195)\t(29538)\n\t53852\t60363\n", "q10k_tbl_17": "\tGoodwill\nDecember 31 2018\t0\nAcquisition of American Electric\t139\nAcquisition of Diversenergy\t4314\nDecember 31 2019\t4453\n", "q10k_tbl_18": "\tSeptember 30 2020\tDecember 31 2019\nAssets:\t\t\nTotal current assets\t60324\t81247\nTotal non-current assets\t5675\t5775\nTotal assets\t65999\t87022\nLiabilities and equity:\t\t\nTotal liabilities\t37597\t58176\nTotal joint ventures' equity\t28402\t28846\nTotal liabilities and equity\t65999\t87022\n", "q10k_tbl_19": "\tThree Months Ended September 30\tNine Months Ended September 30\n\t2020\t2020\t\t\t\t\t\t\nRevenue\t17641\t44844\t\t\t\t\t\t\nGross Profit\t3224\t7456\t\t\t\t\t\t\nEarnings\t1663\t3662\t\t\t\t\t\t\n", "q10k_tbl_20": "\tSeptember 30 2020\tJuly 27 2019 to December 31 2019\nInvestments in BOMAY (1) (2)\t\t\nBalance at the beginning of the period\t9333\t9333\nUndistributed earnings:\t\t\nBalance at the beginning of the period\t1257\t0\nEquity in earnings\t1529\t1257\nDividend distributions\t(2054)\t0\nBalance at end of period\t732\t1257\nForeign currency translation:\t\t\nBalance at the beginning of the period\t(69)\t0\nChange during the period\t320\t(69)\nBalance at end of period\t251\t(69)\nTotal investment in BOMAY at end of period\t10316\t10521\n", "q10k_tbl_21": "\tSeptember 30 2020\tDecember 31 2019\nCompensation and benefits\t1709\t2641\nProfessional fees\t364\t131\nLNG fuel and transportation\t1051\t1582\nAccrued interest\t9\t134\nContract liabilities\t402\t185\nOther taxes payable\t383\t163\nOther operating expenses\t198\t182\nTotal accrued liabilities\t4116\t5018\n", "q10k_tbl_22": "\tSeptember 30 2020\tDecember 31 2019\nUnsecured promissory note\t1080\t0\nSecured term note payable - related party\t1077\t2077\nSecured promissory note - related party\t5000\t5000\nInsurance and other notes payable\t744\t558\nLess: amounts due within one year\t(3928)\t(1558)\nTotal long-term debt\t3973\t6077\n", "q10k_tbl_23": "\tSeptember 30 2020\tSeptember 30 2019\nUnsecured promissory note\t4\t0\nSecured term note payable - related party\t57\t339\nSecured promissory note - related party\t224\t56\nInsurance and other notes payable\t24\t34\nTotal interest expense\t309\t429\n", "q10k_tbl_24": "\tClassification\tSeptember 30 2020\tDecember 31 2019\nAssets\t\t\t\nOperating lease assets\tRight-of-use assets\t881\t965\nFinance lease assets\tProperty and equipment net of accumulated depreciation\t8425\t9302\nTotal lease assets\t\t9306\t10267\nLiabilities\t\t\t\nCurrent\t\t\t\nOperating\tCurrent portion of operating lease obligations\t383\t364\nFinance\tCurrent portion of finance lease obligation - related parties\t1312\t3440\nNoncurrent\t\t\t\nOperating\tLong-term portion of operating lease obligation\t565\t650\nFinance\tFinance lease obligations net of current portion - related parties\t0\t648\nTotal lease liabilities\t\t2260\t5102\n", "q10k_tbl_25": "Lease Cost\t\tClassification\t\tThree Months Ended September 30\t\t\t\tNine Months Ended September 30\t\n\t2020\t\t2019\t\t2020\t\t2019\nOperating lease cost\t\tCost of sales\t\t42\t\t29\t\t122\t116\nOperating lease cost\t\tSelling general and administrative expenses\t\t4\t\t75\t\t185\t182\nFinance lease cost\t\t\t\t\t\t\t\t\t\nAmortization of leased assets\t\tDepreciation\t\t294\t\t274\t\t879\t858\nInterest on lease liabilities\t\tInterest expense\t\t104\t\t170\t\t400\t510\nNet lease cost\t\t\t\t444\t\t548\t\t1586\t1666\n", "q10k_tbl_26": "\tOperating Leases\tFinance Leases\tTotal\nRemainder 2020\t139\t727\t866\n2021\t429\t646\t1075\n2022\t172\t0\t172\n2023\t145\t0\t145\n2024\t149\t0\t149\nThereafter\t25\t0\t25\nTotal lease payments\t1059\t1373\t2432\nLess: Interest\t(111)\t(61)\t(172)\nPresent value of lease liabilities\t948\t1312\t2260\n", "q10k_tbl_27": "Other information\tSeptember 30 2020\tSeptember 30 2019\n\t(In thousands)\t\nCash paid for amounts included in the measurement of lease liabilities\t\t\nOperating cash flows from operating leases\t287\t298\nFinancing cash flows from finance leases\t2640\t2582\nInterest paid\t400\t510\nNoncash activities from right-of-use assets obtained in exchange for lease obligations:\t\t\nOperating leases\t1163\t1173\n", "q10k_tbl_28": "Date of Issuance\tNo. of Warrants\tExercise Price\tExpiration Date\nNov. 13 2017\t62500\t18.08\tNov. 13 2022\n", "q10k_tbl_29": "\tThree Months Ended September 30\t\tChange\t% Change\n\t2020\t2019\n\t(unaudited)\t\t\n\t(In thousands excluding percentages)\t\t\t\nRevenue:\t\t\t\t\nLNG product\t6594\t7919\t(1325)\t(16.7)%\nRental service and other\t1073\t1224\t(151)\t(12.3)\nPower delivery\t1352\t1371\t(19)\t(1.4)\nTotal revenues\t9019\t10514\t(1495)\t(14.2)\nOperating expenses:\t\t\t\t\nCosts of LNG product\t5044\t5441\t(397)\t(7.3)\nCosts of rental service and other\t808\t1095\t(287)\t(26.2)\nCosts of power delivery\t996\t1144\t(148)\t(12.9)\nSelling general and administrative\t2338\t3781\t(1443)\t(38.2)\nDepreciation\t2266\t2307\t(41)\t(1.8)\nTotal operating expenses\t11452\t13768\t(2316)\t(16.8)\nLoss from operations before equity income\t(2433)\t(3254)\t821\t(25.2)\nNet equity income from foreign joint ventures' operations:\t\t\t\t\nIncome from investments in foreign joint ventures\t642\t187\t455\t243.3\nForeign joint venture's operations related expenses\t(69)\t(52)\t(17)\t32.7\nNet equity income from foreign joint ventures' operations\t573\t135\t438\t324.4\nLoss from operations\t(1860)\t(3119)\t1259\t(40.4)\nOther income (expense):\t\t\t\t\nInterest expense net\t(2)\t(33)\t31\t(93.9)\nInterest expense net - related parties\t(199)\t(306)\t107\t(35.0)\nOther income (expense)\t(31)\t124\t(155)\t(125.0)\nGain from disposal of assets\t0\t17\t(17)\t(100.0)\nTotal other income (expense)\t(232)\t(198)\t(34)\t17.2\nLoss before income tax expense\t(2092)\t(3317)\t1225\t(36.9)\nIncome tax expense\t41\t38\t3\t7.9\nNet loss\t(2133)\t(3355)\t1222\t(36.4)%\n", "q10k_tbl_30": "\tThree Months Ended September 30\t\tChange\t% Change\n\t2020\t2019\n\t(unaudited)\t\t\n\t(In thousands excluding percentages)\t\t\t\nRevenue:\t\t\t\t\nLNG product\t6594\t7919\t(1325)\t(16.7)%\nRental service and other\t1073\t1224\t(151)\t(12.3)\nTotal revenues\t7667\t9143\t(1476)\t(16.1)\nOperating expenses:\t\t\t\t\nCosts of LNG product\t5044\t5441\t(397)\t(7.3)\nCosts of rental service and other\t808\t1095\t(287)\t(26.2)\nSelling general and administrative\t1757\t3318\t(1561)\t(47.0)\nDepreciation\t2237\t2277\t(40)\t(1.8)\nTotal operating expenses\t9846\t12131\t(2285)\t(18.8)\nLoss from operations before equity income\t(2179)\t(2988)\t809\t(27.1)%\n", "q10k_tbl_31": "\tThree Months Ended September 30\t\tChange\t% Change\n\t2020\t2019\n\t(unaudited)\t\t\n\t(In thousands excluding percentages)\t\t\t\nRevenue:\t\t\t\t\nPower delivery\t1352\t1371\t(19)\t(1.4)%\nTotal revenues\t1352\t1371\t(19)\t(1.4)\nOperating expenses:\t\t\t\t\nCosts of power delivery\t996\t1144\t(148)\t(12.9)\nSelling general and administrative\t581\t463\t118\t25.5\nDepreciation\t29\t30\t(1)\t(3.3)\nTotal operating expenses\t1606\t1637\t(31)\t(1.9)\nLoss from operations before equity income\t(254)\t(266)\t12\t(4.5)\nNet equity income from foreign joint ventures' operations:\t\t\t\t\nIncome from equity investments in foreign joint ventures\t642\t187\t455\t243.3\nForeign joint venture's operations related expenses\t(69)\t(52)\t(17)\t32.7\nNet equity income from foreign joint ventures' operations\t573\t135\t438\t324.4\nIncome (loss) from operations\t319\t(131)\t450\t(343.5)%\n", "q10k_tbl_32": "\tNine Months Ended September 30\t\tChange\t% Change\n\t2020\t2019\n\t(unaudited)\t\t\t\n\t(In thousands excluding percentages)\t\t\t\nRevenue:\t\t\t\t\nLNG product\t18609\t26872\t(8263)\t(30.7)%\nRental service and other\t5613\t6341\t(728)\t(11.5)\nPower delivery\t3638\t1371\t2267\t165.4\nTotal revenues\t27860\t34584\t(6724)\t(19.4)\nOperating expenses:\t\t\t\t\nCosts of LNG product\t13692\t19051\t(5359)\t(28.1)\nCosts of rental service and other\t3381\t3538\t(157)\t(4.4)\nCosts of power delivery\t3131\t1144\t1987\t173.7\nSelling general and administrative\t7892\t8139\t(247)\t(3.0)\nDepreciation\t6802\t6892\t(90)\t(1.3)\nTotal operating expenses\t34898\t38764\t(3866)\t(10.0)\nLoss from operations before equity income\t(7038)\t(4180)\t(2858)\t68.4\nNet equity income from foreign joint ventures' operations:\t\t\t\t\nIncome from investments in foreign joint ventures\t1529\t187\t1342\t717.6\nForeign joint venture's operations related expenses\t(182)\t(52)\t(130)\t250.0\nNet equity income from foreign joint ventures' operations\t1347\t135\t1212\t897.8\nLoss from operations\t(5691)\t(4045)\t(1646)\t40.7\nOther income (expense):\t\t\t\t\nInterest expense net\t(28)\t(37)\t9\t(24.3)\nInterest expense net - related parties\t(681)\t(910)\t229\t(25.2)\nOther income (expense)\t(6)\t61\t(67)\t(109.8)\nGain from disposal of assets\t11\t17\t(6)\t(35.3)\nTotal other income (expense)\t(704)\t(869)\t165\t(19.0)\nLoss before income tax expense\t(6395)\t(4914)\t(1481)\t30.1\nIncome tax expense\t251\t38\t213\t560.5\nNet loss\t(6646)\t(4952)\t(1694)\t34.2\nNet income attributable to noncontrolling interests\t0\t207\t(207)\t(100.0)\nNet loss attributable to Stabilis Solutions Inc.\t(6646)\t(5159)\t(1487)\t28.8%\n", "q10k_tbl_33": "\tNine Months Ended September 30\t\tChange\t% Change\n\t2020\t2019\n\t(unaudited)\t\t\t\n\t(In thousands excluding percentages)\t\t\t\nRevenue:\t\t\t\t\nLNG product\t18609\t26872\t(8263)\t(30.7)%\nRental service and other\t5613\t6341\t(728)\t(11.5)\nTotal revenues\t24222\t33213\t(8991)\t(27.1)\nOperating expenses:\t\t\t\t\nCosts of LNG product\t13692\t19051\t(5359)\t(28.1)\nCosts of rental service and other\t3381\t3538\t(157)\t(4.4)\nSelling general and administrative\t6352\t7676\t(1324)\t(17.2)\nDepreciation\t6706\t6862\t(156)\t(2.3)\nTotal operating expenses\t30131\t37127\t(6996)\t(18.8)\nLoss from operations before equity income\t(5909)\t(3914)\t(1995)\t(51.0)%\n", "q10k_tbl_34": "\tNine Months Ended September 30\t\tChange\t% Change\n\t2020\t2019\n\t(unaudited)\t\t\n\t(In thousands excluding percentages)\t\t\t\nRevenue:\t\t\t\t\nPower delivery\t3638\t1371\t2267\t165.4%\nTotal Revenues\t3638\t1371\t2267\t165.4\nOperating Expenses:\t\t\t\t\nCosts of power delivery\t3131\t1144\t1987\t173.7\nSelling general and administrative\t1540\t463\t1077\t232.6\nDepreciation\t96\t30\t66\t220.0\nTotal operating expenses\t4767\t1637\t3130\t191.2\nLoss from operations before equity income\t(1129)\t(266)\t(863)\t324.4\nNet equity income from foreign joint ventures' operations:\t\t\t\t\nIncome from equity investments in foreign joint ventures\t1529\t187\t1342\t717.6\nForeign joint venture's operations related expenses\t(182)\t(52)\t(130)\t250.0\nNet equity income from foreign joint ventures' operations\t1347\t135\t1212\t897.8\nIncome (loss) from operations\t218\t(131)\t349\t(266.4)%\n", "q10k_tbl_35": "\tNine Months Ended September 30\t\n\t2020\t2019\t\t\t\t\t\t\n\t(unaudited)\t\t\t\t\t\t\t\n\t(In thousands)\t\t\t\t\t\t\t\nNet cash provided by (used in):\t\t\t\t\t\t\t\t\nOperating activities\t2467\t3721\t\t\t\t\t\t\nInvesting activities\t(315)\t(3243)\t\t\t\t\t\t\nFinancing activities\t(2564)\t2791\t\t\t\t\t\t\nEffect of exchange rate changes on cash\t(157)\t0\t\t\t\t\t\t\nNet increase (decrease) in cash and cash equivalents\t(569)\t3269\t\t\t\t\t\t\nCash and cash equivalents beginning of period\t3979\t1247\t\t\t\t\t\t\nCash and cash equivalents end of period\t3410\t4516\t\t\t\t\t\t\n", "q10k_tbl_36": "\tSeptember 30 2020\nRemainder 2020\t357\n2021\t4320\n2022\t3224\n2023\t0\n2024\t0\nThereafter\t0\nTotal long-term debt including current maturities\t7901\n", "q10k_tbl_37": "Exhibit No.\tExhibit Description\n2.1\t(1) Share Exchange Agreement dated December 17 2018 by and among American Electric Technologies Inc. LNG Investment Company LLC AEGIS NG LLC Stabilis Energy LLC and PEG Partners LLC (Incorporated by reference to Registrant's Current Report on Form 8-K filed December 24 2018)\n2.2\t(1) Amendment dated May 8 2019 to the Share Exchange Agreement concerning the business combination with Stabilis (Incorporated by reference to Exhibit 2.1 to Registrant's Current Report on Form 8-K filed May 9 2019)\n3.1\tAmended and Restated Articles of Incorporation of the Registrant (Incorporated by Reference to Exhibit 3.1 to Registrant's Current Report on Form 8-K filed October 15 2020)\n3.2\tAmended and Restated Bylaws of the Registrant (Incorporated by Reference to Exhibit 3.2 to Registrant's Current Report on Form 8-K filed September 18 2020)\n4.1\tWarrant to purchase 125000 shares of Registrant's common stock dated May 2 2012 (Incorporated by reference to Exhibit 4.1 to Registrant's Quarterly Report on Form 10-Q filed on August 14 2012)\n4.2\tWarrant to purchase 200000 shares of Registrant's common stock dated May 2 2012 (Incorporated by reference to Exhibit 4.2 to Registrant's Quarterly Report on Form 10-Q filed on August 14 2012)\n4.3\tInvestors Rights Agreement between Registrant and JCH Crenshaw Holdings LLC dated May 2 2012 (Incorporated by reference to Exhibit 4.3 to Registrant's Quarterly Report on Form 10-Q filed on August 14 2012)\n4.4\tRegistration Rights Agreement between Registrant and JCH Crenshaw Holdings LLC dated May 2 2012 (Incorporated by reference to Exhibit 4.4 to Registrant's Quarterly Report on Form 10-Q filed on August 14 2012)\n4.5\tWarrant to Purchase Common Stock dated November 13 2017 issued to HD Special-Situations III LP (Incorporated by reference to Exhibit 10.3 to Registrant's Quarterly Report on Form 10-Q filed on November 14 2017)\n4.6\tRegistration Rights Agreement dated November 13 2017 between Registrant and HD Special-Situations III LP (Incorporated by reference to Exhibit 10.4 to Registrant's Quarterly Report on Form 10-Q filed on November 14 2017)\n4.7\tVoting Agreement dated as of December 17 2018 by and among JCH Crenshaw Holdings LLC and certain stockholders of Registrant (Incorporated by reference to Exhibit B of Amendment No. 8 to Schedule 13D filed by JCH Crenshaw Holdings LLC and J. Casey Crenshaw on December 28 2018)\n4.8\tRegistration Rights Agreement dated July 26 2019 by and among Registrant LNG Investment Company LLC and AEGIS NG LLC (Incorporated by Reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K filed August 1 2019)\n4.9\tRegistration Rights Agreement dated as of August 20 2019 by and among Registrant and the Investors named therein (Incorporated by Reference to Exhibit 4.9 to Registrant's Registration Statement on Form S-1 filed September 11 2019)\n31.1\t*Rule 13a-14(a) / 15d-14(a) Certification of Principal Executive Officer.\n31.2\t*Rule 13a-14(a) / 15d-14(a) Certification of Principal Financial Officer.\n32.1\t*Section 1350 Certifications of Principal Executive Officer and Principal Financial Officer.\n101.INS\tXBRL Instance Document.\n101.SCH\tXBRL Taxonomy Extension Schema Document.\n101.CAL\tXBRL Taxonomy Extension Calculation Linkbase Document.\n101.DEF\tXBRL Taxonomy Extension Definition Linkbase Document.\n101.LAB\tXBRL Taxonomy Extension Labels Linkbase Document.\n101.PRE\tXBRL Taxonomy Extension Presentation Linkbase Document.\n"}{"bs": "q10k_tbl_2", "is": "q10k_tbl_3", "cf": "q10k_tbl_7"}None
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED September 30, 2020
☐
TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
Commission File No. 000-24575
____________________
STABILIS SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
____________________
Florida
59-3410234
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
10375 Richmond Avenue, Suite 700, Houston, TX77042
(Address of principal executive offices, including zip code)
(832) 456-6500
(Registrant’s telephone number, including area code)
Stabilis Energy, Inc.
(Former name)
Title of each class
Trading symbol
Name of each exchange on which registered
Common Stock, $.001 par value per share
SLNG
The OTCQX Best Market
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 (S. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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, indicate 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 November 10, 2020, there were 16,896,626 outstanding shares of our common stock, par value $.001 per share.
This document includes statements that constitute forward-looking statements within the meaning of the federal securities laws. These statements are subject to risks and uncertainties. These statements may relate to, but are not limited to, information or assumptions about us, our capital and other expenditures, dividends, financing plans, capital structure, cash flow, our recent business combination, pending legal and regulatory proceedings and claims, including environmental matters, future economic performance, operating income, cost savings, and management’s plans, strategies, goals and objectives for future operations and growth. These forward-looking statements generally are accompanied by words such as “intend,” “anticipate,” “believe,” “estimate,” “expect,” “should,” “seek,” “project,” “plan” or similar expressions. Any statement that is not a historical fact is a forward-looking statement. It should be understood that these forward-looking statements are necessarily estimates reflecting the best judgment of senior management, not guarantees of future performance. They are subject to a number of assumptions, risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described in Part II. “Item 1A. Risk Factors” in this document.
Forward-looking statements represent intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In addition to the risk factors and other cautionary statements described in Part II. “Item 1A. Risk Factors” in this document, the factors include:
•our ability to execute our business strategy;
•our limited operating history;
•our ability to satisfy our liquidity needs, including our ability to generate sufficient liquidity or cash flow from operations and our ability to obtain additional financing to affect our strategy;
•loss of one or more of our customers;
•credit and performance risk of our customers and contractual counterparties;
•cyclical or other changes in the demand for and price of LNG and natural gas;
•operational, regulatory, environmental, political, legal and economic risks pertaining to the construction and operation of our facilities;
•the effects of current and future worldwide economic conditions and demand for oil and natural gas and power system equipment and services;
•hurricanes or other natural or man-made disasters;
•public health crises, such as the ongoing COVID-19 outbreak, which could further deteriorate economic conditions;
•dependence on contractors for successful completions of our energy related infrastructure;
•reliance on third party engineers;
•competition from third parties in our business;
•failure of LNG to be a competitive source of energy in the markets in which we operate, and seek to operate;
•increased labor costs, and the unavailability of skilled workers or our failure to attract and retain qualified personnel;
•major health and safety incidents relating to our business;
•failure to obtain and maintain approvals and permits from governmental and regulatory agencies including with respect to our planned operational expansion in Mexico;
•changes to health and safety, environmental and similar laws and governmental regulations that are adverse to our operations;
•volatility of the market price of our common stock;
•our ability to successfully integrate acquisitions; and
•future benefits to be derived from our investments in technologies, joint ventures and acquired companies.
Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in the forward-looking statements contained herein. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. All forward-looking statements included in this document are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.
In this Quarterly Report on Form 10-Q, we may rely on and refer to information from market research reports, analyst reports and other publicly available information. Although we believe that this information is reliable, we cannot guarantee the accuracy and completeness of this information, and we have not independently verified it.
3
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Stabilis Solutions, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands, except share and per share data)
September 30, 2020
December 31, 2019
Assets
Current assets:
Cash and cash equivalents
$
3,410
$
3,979
Accounts receivable, net
1,993
5,945
Inventories, net
161
209
Prepaid expenses and other current assets
3,712
3,583
Total current assets
9,276
13,716
Property, plant and equipment, net
53,852
60,363
Right-of-use assets
881
965
Goodwill
4,453
4,453
Investments in foreign joint ventures
10,316
10,521
Other noncurrent assets
306
308
Total assets
$
79,084
$
90,326
Liabilities and Equity
Current liabilities:
Current portion of long-term notes payable
$
447
$
—
Current portion of long-term notes payable - related parties
2,737
1,000
Current portion of finance lease obligation - related parties
1,312
3,440
Current portion of operating lease obligations
383
364
Short-term notes payable
744
558
Accrued liabilities
4,116
5,018
Accounts payable
3,273
4,728
Total current liabilities
13,012
15,108
Long-term notes payable, net of current portion
633
—
Long-term notes payable, net of current portion - related parties
3,340
6,077
Finance lease obligations, net of current portion - related parties
—
648
Long-term portion of operating lease obligations
565
650
Deferred compensation
72
—
Deferred income taxes
32
—
Total liabilities
17,654
22,483
Commitments and contingencies (Note 14)
Stockholders’ Equity:
Preferred Stock; $0.001 par value, 1,000,000 shares authorized, no shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively
—
—
Common stock; $0.001 par value, 37,500,000 shares authorized, 16,896,626 and 16,800,612 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively (Note 14)
17
17
Additional paid-in capital
91,092
90,748
Accumulated other comprehensive loss
(402)
(291)
Accumulated deficit
(29,277)
(22,631)
Total stockholders’ equity
61,430
67,843
Total liabilities and equity
$
79,084
$
90,326
The accompanying notes are an integral part of the condensed consolidated financial statements.
4
Stabilis Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except share and per share data)
Three Months Ended September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
Revenue
LNG product
$
6,594
$
7,919
$
18,609
$
26,872
Rental, service and other
1,073
1,224
5,613
6,341
Power delivery
1,352
1,371
3,638
1,371
Total revenues
9,019
10,514
27,860
34,584
Operating expenses:
Costs of LNG product
5,044
5,441
13,692
19,051
Costs of rental, service and other
808
1,095
3,381
3,538
Costs of power delivery
996
1,144
3,131
1,144
Selling, general and administrative expenses
2,338
3,781
7,892
8,139
Depreciation expense
2,266
2,307
6,802
6,892
Total operating expenses
11,452
13,768
34,898
38,764
Loss from operations before equity income
(2,433)
(3,254)
(7,038)
(4,180)
Net equity income from foreign joint ventures' operations:
Income from equity investments in foreign joint ventures
642
187
1,529
187
Foreign joint ventures' operations related expenses
(69)
(52)
(182)
(52)
Net equity income from foreign joint ventures' operations
573
135
1,347
135
Loss from operations
(1,860)
(3,119)
(5,691)
(4,045)
Other income (expense):
Interest expense, net
(2)
(33)
(28)
(37)
Interest expense, net - related parties
(199)
(306)
(681)
(910)
Other income (expense)
(31)
124
(6)
61
Gain from disposal of fixed assets
—
17
11
17
Total other income (expense)
(232)
(198)
(704)
(869)
Loss before income tax expense
(2,092)
(3,317)
(6,395)
(4,914)
Income tax expense
41
38
251
38
Net loss
(2,133)
(3,355)
(6,646)
(4,952)
Net income attributable to noncontrolling interests
—
—
—
207
Net loss attributable to Stabilis Solutions, Inc.
$
(2,133)
$
(3,355)
$
(6,646)
$
(5,159)
Common Stock Data:
Net loss per common share:
Basic and diluted
$
(0.13)
$
(0.22)
$
(0.39)
$
(0.37)
Weighted average number of common shares outstanding:
Basic and diluted
16,896,626
15,070,733
16,867,939
13,816,341
The accompanying notes are an integral part of the condensed consolidated financial statements.
5
Stabilis Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Loss
(Unaudited)
(in thousands)
Three Months Ended September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
Net loss
$
(2,133)
$
(3,355)
$
(6,646)
$
(4,952)
Foreign currency translation adjustment
424
(530)
(111)
(530)
Total comprehensive loss
(1,709)
(3,885)
(6,757)
(5,482)
Total comprehensive income attributable to noncontrolling interest
—
—
—
207
Total comprehensive loss attributable to Stabilis Solutions, Inc.
$
(1,709)
$
(3,885)
$
(6,757)
$
(5,689)
The accompanying notes are an integral part of the condensed consolidated financial statements.
6
Stabilis Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
(in thousands, except share data)
Common Stock
Shares
Amount
Additional Paid-in Capital
Accumulated Other Comprehensive Income (Loss)
Accumulated Deficit
Non-controlling Interest
Total
Balance at December 31, 2019
16,800,612
$
17
$
90,748
$
(291)
$
(22,631)
$
—
$
67,843
Common stock issued
34,706
—
—
—
—
—
—
Stock-based compensation
—
—
19
—
—
—
19
Net loss
—
—
—
—
(1,050)
—
(1,050)
Other comprehensive loss
—
—
—
(619)
—
—
(619)
Balance at March 31, 2020
16,835,318
17
90,767
(910)
(23,681)
—
66,193
Common stock issued
61,308
—
—
—
—
—
—
Stock-based compensation
—
—
139
—
—
—
139
Net loss
—
—
—
—
(3,463)
—
(3,463)
Other comprehensive income
—
—
—
84
—
—
84
Balance at June 30, 2020
16,896,626
17
90,906
(826)
(27,144)
—
$
62,953
Common stock issued
—
—
—
—
—
—
—
Stock-based compensation
—
—
186
—
—
—
186
Net loss
—
—
—
—
(2,133)
—
(2,133)
Other comprehensive income
—
—
—
424
—
—
424
Balance at September 30, 2020
16,896,626
$
17
$
91,092
$
(402)
$
(29,277)
$
—
$
61,430
Common Stock
Shares
Amount
Additional Paid-in Capital
Accumulated Other Comprehensive Loss
Accumulated Deficit
Non-controlling Interest
Total
Balance at December 31, 2018
13,178,750
$
13
$
68,244
$
—
$
(16,916)
$
1,323
$
52,664
Net loss
—
—
—
—
(738)
179
(559)
Balance at March 31, 2019
13,178,750
13
68,244
—
(17,654)
1,502
52,105
Net loss
—
—
—
—
(1,066)
28
(1,038)
Balance at June 30, 2019
13,178,750
13
68,244
—
(18,720)
1,530
51,067
Recapitalization due to reverse merger
1,466,092
1
12,618
—
—
(1,530)
11,089
Shares issued in extinguishment of debt
1,470,807
2
6,887
—
—
—
6,889
Shares issued in acquisition of Diversenergy
684,963
1
2,999
—
—
—
3,000
Net loss
—
—
—
—
(3,355)
—
(3,355)
Other comprehensive loss
—
—
—
(530)
—
—
(530)
Balance at September 30, 2019
16,800,612
$
17
$
90,748
$
(530)
$
(22,075)
$
—
$
68,160
The accompanying notes are an integral part of the condensed consolidated financial statements.
7
Stabilis Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
Nine Months Ended September 30,
2020
2019
Cash flows from operating activities:
Net loss
$
(6,646)
$
(4,952)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization
6,802
6,892
Deferred income tax expense
41
—
Stock-based compensation expense
344
—
Bad debt expense
144
147
Gain on disposal of fixed assets
(11)
(17)
Gain on extinguishment of debt
—
(116)
Income from equity investment in joint venture
(1,529)
(187)
Distributions from equity investment in joint venture
2,054
—
Deferred compensation costs
72
—
Change in operating assets and liabilities, net of acquisitions:
Accounts receivable
3,629
1,823
Due to (from) related parties
—
113
Inventories
48
67
Prepaid expenses and other current assets
(396)
(1,184)
Accounts payable and accrued liabilities
(2,085)
1,117
Other
—
18
Net cash provided by operating activities
2,467
3,721
Cash flows from investing activities:
Acquisition of fixed assets
(327)
(2,103)
Proceeds on sales of fixed assets
12
125
Acquisition of American Electric, net of cash received
—
(1,876)
Acquisition of Diversenergy, net of cash received
—
611
Net cash used in investing activities
(315)
(3,243)
Cash flows from financing activities:
Proceeds on long-term borrowings
1,080
—
Proceeds on long-term borrowings from related parties
—
5,000
Payments on long-term borrowings from related parties
(3,776)
(2,582)
Proceeds from short-term notes payable
776
767
Payments on short-term notes payable
(644)
(394)
Net cash provided by (used in) financing activities
(2,564)
2,791
Effect of exchange rate changes on cash
(157)
—
Net increase (decrease) in cash and cash equivalents
(569)
3,269
Cash and cash equivalents, beginning of period
3,979
1,247
Cash and cash equivalents, end of period
$
3,410
$
4,516
Supplemental disclosure of cash flow information:
Interest paid
$
834
$
1,108
Income taxes paid
210
—
Non-cash investing and financing activities:
Extinguishment of long-term debt through issuance of common stock
$
—
$
7,000
The accompanying notes are an integral part of the condensed consolidated financial statements
8
STABILIS SOLUTIONS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. Overview and Basis of Presentation
Overview
Stabilis Solutions, Inc. and its subsidiaries (the “Company”, “Stabilis”, “our”, “us” or “we”) produce, market, and sell liquefied natural gas (“LNG”). The Company also resells liquefied natural gas from third parties and provides services, transportation, and equipment to customers. The Company changed its name from Stabilis Energy, Inc. to Stabilis Solutions, Inc. on October 9, 2020.
The Company is a supplier of LNG to the industrial, midstream, and oilfield sectors in North America and provides turnkey fuel solutions to help industrial users of propane, diesel and other crude-based fuel products convert to LNG, which may result in reduced fuel costs and improved environmental footprint. Stabilis opened its 100,000 gallons per day (“gpd”) LNG production facility in George West, Texas in January 2015 to service industrial and oilfield customers in Texas and the greater Gulf Coast region. The Company owns a second liquefaction plant capable of producing 25,000 gpd that is currently not in operation. Stabilis is vertically integrated from LNG production through distribution including cryogenic equipment rental and field services.
The Company also provides power delivery equipment and services through its subsidiary in Brazil, M&I Electric Brazil Sistemas e Servicios em Energia LTDA (“M&I Brazil”) and its 40% interest in a joint venture in China, BOMAY Electric Industries Co., Ltd. (“BOMAY”).
Basis of Presentation
The accompanying interim unaudited condensed consolidated financial statements include our accounts and those of our subsidiaries and, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and disclosures normally included in the notes to condensed consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. We believe that the presentation and disclosures herein are adequate to make the information not misleading. The unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) for a fair presentation of the interim periods. The results of operations for the interim period are not necessarily indicative of the results of operations to be expected for the full year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2019 included in the Company's Annual Report on Form 10-K, as filed on March 16, 2020.
All intercompany accounts and transactions have been eliminated in consolidation. In the Notes to Condensed Consolidated Financial Statements (Unaudited), all dollar amounts in tabulations are in thousands, unless otherwise indicated.
The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company is required to make certain disclosures if it concludes that there is substantial doubt about the entity’s ability to continue as a going concern within one year from the date of the issuance of these financial statements. The Company has incurred recurring operating losses and has negative working capital. The Company is subject to substantial business risks and uncertainties inherent in the current LNG industry. Additionally, the impact of the COVID-19 pandemic has created additional uncertainties regarding the future demand for LNG from our customers. There is no assurance that the Company will be able to generate sufficient revenues in the future to sustain itself or to support future growth.
These factors were reviewed by management to determine if there was substantial doubt as to the Company’s ability to continue as a going concern. Management concluded that its plan to address the Company’s liquidity issues would allow it to continue as a going concern. A number of cost control measures have been implemented, including headcount reductions, temporary salary reductions, travel reductions, elimination of certain consultants, and other measures to adjust to anticipated activity levels and maintain adequate liquidity. Furthermore, the Company has recently seen a resumption of activity with existing customers as well as new revenue opportunities, particularly in Mexico. Accordingly, management believes the business will generate sufficient cash flows from its operations to fund the business for the next 12 months.
9
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates include the carrying amount of contingencies, valuation allowances for receivables, inventories, and deferred income tax assets, valuations assigned to assets and liabilities in business combinations, and impairments of long-lived assets. Actual results could differ from those estimates, and these differences could be material to the condensed consolidated financial statements.
2. Recent Accounting Pronouncements
Recently Adopted Accounting Standards
In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04, “Intangibles – Goodwill and Other: Simplifying the Test for Goodwill Impairment” (“ASU No. 2017-04”). The new guidance simplifies the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The amendments of ASU No. 2017-04 were adopted by the Company effective January 1, 2020. The adoption of this standard had no impact on our condensed consolidated financial position or results of operations, as the adoption is applied on a prospective basis.
Recently Issued Accounting Standards
In December 2019, the FASB issued ASU No. 2019-12, “Simplifying the Accounting for Income Taxes” (ASU No. 2019-12), which simplifies the accounting for income taxes by removing certain exceptions to the general principles of Topic 740, Income Taxes and also improves consistent application by clarifying and amending existing guidance. ASU No. 2019-12 is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. We are currently evaluating the impact of this guidance on our condensed consolidated financial statements.
In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU No. 2020-04”), which provides guidance to alleviate the burden in accounting for reference rate reform by allowing certain expedients and exceptions in applying generally accepted accounting principles to contract modifications, hedging relationships, and other transactions impacted by reference rate reform. The provisions of ASU No. 2020-04 apply only to those transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. Adoption of the provisions of ASU No. 2020-04 are optional and are effective from March 12, 2020 through December 31, 2022. We are currently evaluating the impact of ASU No. 2020-04 on our condensed consolidated financial statements.
3. Acquisitions
American Electric Technologies, Inc (“American Electric”). On July 26, 2019, we completed the Share Exchange with American Electric and its subsidiaries and began operating under the name Stabilis Energy, Inc., since changed to Stabilis Solutions, Inc. Because the former owners of Stabilis Energy, LLC owned 88.4% of the voting stock of the combined company immediately following the effective date and certain other factors, including that directors designated by LNG Investment, parent of Stabilis Energy, LLC, constituted a majority of the board of directors, Stabilis Energy, LLC is treated as the acquiror of American Electric in the Share Exchange for accounting purposes. As a result, the Share Exchange is treated by American Electric as a reverse acquisition under the purchase method of accounting in accordance with US GAAP.
The aggregate consideration paid in connection with the Share Exchange was allocated to American Electric’s tangible and intangible assets and liabilities based on their fair values at the time of the completion of the Share Exchange. The assets and liabilities and results of operations of American Electric are consolidated into the results of operations of Stabilis as of the completion of the Share Exchange.
Consistent with the purchase method of accounting, the total purchase price is allocated to the acquired tangible and intangible assets and assumed liabilities of American Electric based on their estimated fair values as of the Share Exchange closing date. The excess of the purchase price over the fair value of the acquired assets and liabilities assumed is reflected as
10
goodwill and is attributable to strategic advantages gained from the acquisition of a public entity with access to LNG markets in Brazil and China. All of the goodwill is assigned to the Power Delivery segment and is not expected to be deductible for income tax purposes.
Diversenergy, LLC (“Diversenergy”). On August 20, 2019, we completed our acquisition of Diversenergy and its subsidiaries. We purchased all of the issued and outstanding membership interests of Diversenergy for total consideration of 684,963 shares of Company common stock valued at $3.0 million as of the closing date and $2.0 million in cash, subject to adjustments for Diversenergy’s net working capital as of the closing date. Diversenergy specializes in LNG distribution, providing LNG to customers which use it as a fuel in mobile high horsepower applications and to customers which do not have natural gas pipeline access. The completion of the acquisition will expand the Company's presence in the distributed LNG and compressed natural gas (“CNG”) markets in Mexico.
Consistent with the purchase method of accounting, the total purchase price is allocated to the acquired tangible and intangible assets and assumed liabilities of Diversenergy based on their estimated fair values as of the closing date. The excess of the purchase price over the fair value of the acquired assets and liabilities assumed is reflected as goodwill and is attributable to the strategic opportunities to grow the Company's LNG and CNG business in Mexico. All of the goodwill is assigned to the LNG segment and is not expected to be deductible for income tax purposes.
The assets and liabilities and results of operations of Diversenergy are consolidated into the results of operations of Stabilis as of the acquisition date.
Proforma Results from Acquisitions (unaudited)
The following unaudited consolidated pro forma information is presented as if the above acquisitions had occurred on January 1, 2019 (in thousands):
Three Months Ended September 30,
Nine Months Ended September 30,
2019
2019
Revenue
$
11,302
$
38,543
Net loss
(4,402)
(5,846)
This unaudited pro forma amounts above have been compiled from current and historical financial statements and is not necessarily indicative of the results that actually would have been achieved had the transaction occurred as of January 1, 2019 or of future operating results.
4. Revenue Recognition
Disaggregated Revenues
The table below presents revenue disaggregated by source, for the three and nine months ended September 30, 2020 and 2019 (in thousands):
Three Months Ended September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
LNG Product
$
6,594
$
7,919
$
18,609
$
26,872
Rental
737
759
4,012
4,340
Service
187
7
593
689
Power Delivery
1,352
1,371
3,638
1,371
Other
149
458
1,008
1,312
$
9,019
$
10,514
$
27,860
$
34,584
See Note 5—Business Segments, below, for additional disaggregation of revenue.
11
Contract Liabilities
The Company recognizes contract liabilities upon receipt of payments for which the performance obligations have not been fulfilled at the reporting date, resulting in deferred revenue. Contract liabilities are included in accrued liabilities in the accompanying unaudited condensed consolidated balance sheets. The following table presents the changes in the Company’s contract liabilities for the periods ended September 30, 2020 and December 31, 2019 (in thousands):
September 30, 2020
December 31, 2019
Balance at beginning of period
$
185
$
93
Cash received, excluding amounts recognized as revenue
694
185
Amounts recognized as revenue
(477)
(93)
Balance at end of period
$
402
$
185
The Company has no other material contract assets or liabilities and contract costs.
5. Business Segments
The Company’s revenues are derived from two operating segments: LNG and Power Delivery. The LNG segment supplies LNG to multiple end markets in North America and provides turnkey fuel solutions to help users of propane, diesel and other crude-based fuel products convert to LNG. The Power Delivery segment provides power delivery equipment and services through our subsidiary in Brazil and in China through our 40% interest in BOMAY.
Three Months Ended September 30, 2020
Nine Months Ended September 30, 2020
(in thousands)
(in thousands)
LNG
Power Delivery
Total
LNG
Power Delivery
Total
Revenues
$
7,667
$
1,352
$
9,019
$
24,222
$
3,638
$
27,860
Depreciation
2,237
29
2,266
6,706
96
6,802
Loss from operations before equity income
(2,179)
(254)
(2,433)
(5,909)
(1,129)
(7,038)
Net equity income from foreign joint ventures' operations
—
573
573
—
1,347
1,347
Income (loss) from operations
(2,179)
319
(1,860)
(5,909)
218
(5,691)
Net income (loss)
(2,458)
325
(2,133)
(6,678)
32
(6,646)
September 30, 2020
(in thousands)
LNG
Power Delivery
Total
Total assets
$
65,582
$
13,502
$
79,084
Three Months Ended September 30, 2019
Nine Months Ended September 30, 2019
(in thousands)
(in thousands)
LNG
Power Delivery
Total
LNG
Power Delivery
Total
Revenues
$
9,143
$
1,371
$
10,514
$
33,213
$
1,371
$
34,584
Depreciation
2,277
30
2,307
6,862
30
6,892
Loss from operations before equity income
(2,988)
(266)
(3,254)
(3,914)
(266)
(4,180)
Net equity income from foreign joint ventures' operations
—
135
135
—
135
135
Income (loss) from operations
(2,988)
(131)
(3,119)
(3,914)
(131)
(4,045)
Net loss
(3,209)
(146)
(3,355)
(4,806)
(146)
(4,952)
12
December 31, 2019
(in thousands)
LNG
Power Delivery
Total
Total assets
$
75,883
$
14,443
$
90,326
Our operating segments offer different products and services and are managed separately as business units. Cash, cash equivalents and investments are not managed centrally, so the gains and losses on foreign currency remeasurement, and interest and dividend income, are included in the segments’ results.
6. Prepaid Expenses and Other Current Assets
The Company’s prepaid expenses and other current assets consisted of the following (in thousands):
September 30, 2020
December 31, 2019
Prepaid LNG
$
55
$
189
Prepaid insurance
967
698
Prepaid supplier expenses
295
229
Other receivables
2,046
1,655
Deposits
192
347
Other
157
465
Total prepaid expenses and other current assets
$
3,712
$
3,583
7. Property, Plant and Equipment
The Company’s property, plant and equipment consisted of the following (in thousands):
September 30, 2020
December 31, 2019
Liquefaction plants and systems
$
40,830
$
40,617
Real property and buildings
1,603
1,794
Vehicles and tanker trailers and equipment
46,904
46,597
Computer and office equipment
506
453
Construction in progress
174
409
Leasehold improvements
30
31
90,047
89,901
Less: accumulated depreciation
(36,195)
(29,538)
$
53,852
$
60,363
Depreciation expense for the nine months ended September 30, 2020 and 2019 totaled $6.8 million and $