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0000319458
0000319458
2022-07-15
2022-07-15
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report July 15, 2022
(Date of earliest event reported)
Enservco Corporation
(Exact name of registrant as specified in its charter)
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Delaware
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001-36335
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84-0811316
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(State or other jurisdiction of
incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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14133 County Road 9½
Longmont, Colorado 80504
(Address of principal executive offices) (Zip Code)
(303) 333-3678
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, $0.005 par value
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ENSV
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NYSE American
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934. ☐
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. ☐
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Item 1.01.
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Entry into a Material Definitive Agreement.
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On July 15, 2022, Enservco Corporation (“we” or the “Company”) issued a $1.2 million Convertible Subordinated Promissory Note (the “Note”) to Cross River Partners, LP (“Cross River”), which is an entity controlled by Richard Murphy, our Chief Executive Officer and Chairman. The Note has a six year term and accrues interest at 7.75 percent per annum. The Company is required to make quarterly interest only payments under the Note for the first year starting September 30, 2022, followed by principal and interest payments for the remaining five years based upon a ten year amortization schedule. The Note is unsecured and shall be junior and subordinate to indebtedness which the Company may now or at any time hereafter owe to any lender, whether such indebtedness now exists or is hereafter created or incurred, and whether such indebtedness is fixed or contingent, liquidated or unliquidated.
Subject to any required stockholder consent, all or some of the outstanding principal and accrued but unpaid interest under the Note may be converted at the option of Cross River into either: a) shares of the Company’s common stock at a conversion price of $1.69, the closing sales price of the Company’s common stock on the NYSE/American Exchange on July 14, 2022; or b) the equity securities issued by the Company in an equity offering with offering proceeds to the Company (net of any related placement agent or underwriting fees) of a minimum of $1,200,000 (the “Equity Offering”) at the conversion price per equity security issued in the Equity Offering and subject to the other terms of the Equity Offering. The Optional Conversion may only be exercised by Cross River during the period from the issuance of the Note through the closing date of the Equity Offering.
The Company issued a press release on July 18, 2022 reporting the anticipated filing of its 2022 First Quarter Financial Statements by August 15, 2022, and announcing the closing on a $1.2 Million Convertible Subordinated Promissory Note with Cross River Partners, LP on July 15, 2022.
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Exhibit
Number
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Description
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10.1
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99.1
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| 104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on July 20, 2022.
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Enservco Corporation
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By:
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/s/ Richard A. Murphy
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Richard A. Murphy, Executive Chair and CEO
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Exhibit 10.1
CONVERTIBLE SUBORDINATED PROMISSORY NOTE
| $1,200,000.00 |
July 15, 2022 |
FOR VALUE RECEIVED, Enservco Corporation, a Delaware corporation (“Borrower”), promises to pay to the order of Cross River Partners, LP, a Delaware limited partnership (“Holder”), the original principal sum of ONE MILLION TWO HUNDRED THOUSAND DOLLARS AND NO CENTS ($1,200,000.00), or such other amount as shall then be equal to the outstanding principal amount hereof, in the manner provided in this Promissory Note (this “Note”).
1. Loan.This Note reflects the loan of $1,200,000 made by Holder to Borrower via wire on July 15, 2022.
2. Interest. This Note shall bear interest of Seven and ¾ (7.75) percent per annum.
3. Maturity Date. July 15, 2028 unless sooner converted or prepaid.
4. Payment of Principal and Interest; Maturity. For the first year of this Note, interest only payments shall be required on a quarterly basis, starting September 30, 2022 and following on the last business day of each calendar quarter. Thereafter for the remaining five years of this Note, outstanding principal and interest payments shall be made on a quarterly basis on the last business day of each calendar quarter based upon a ten year amortization schedule with a balloon payment for any outstanding principal and interest due on the Maturity Date (or on the business day prior to Maturity Date if the Maturity Date is a bank holiday).
5. Use of Proceeds. The proceeds under this Note may only be used by Borrower for working capital purposes.
6. Security Interest. The Note is unsecured.
7. Optional Conversion. Subject to any required Borrower stockholder consent as required by the exchange upon which Borrower common stock is then listed, all or some of the outstanding principal and accrued but unpaid interest of this Note, may be converted at the option of Holder into either: a) shares of Borrower common stock at a conversion price of $ 1.69, the closing sales price of the Borrower’s common stock on the NYSE/American Exchange on July 14, 2022; or b) the equity securities issued by Borrower in an equity offering with offering proceeds to Borrower (net of any related placement agent or underwriting fees) of a minimum of $1,200,000 (the “Equity Offering”) at the conversion price per equity security issued in the Equity Offering and subject to the other terms of the Equity Offering. The Optional Conversion provided above may only be exercised by Holder during the period from the issuance of this Note through the closing date of the Equity Offering.
8. Events of Default. The occurrence of any of the following shall constitute an “Event of Default” under this Note:
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a.
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Failure to Pay. The failure of the Borrower to (i) timely pay the Holder hereof any payment of interest, principal or other amounts as and when due hereunder, or (ii) pay the Holder hereof the entire amount of any unpaid principal amount plus any other amounts owed but unpaid hereunder upon Maturity Date.
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b.
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Voluntary Bankruptcy or Insolvency Proceedings. Should Borrower (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of it or of all or a substantial part of its property; (ii) make a general assignment for the benefit of its creditors; or (iii) commence a voluntary case or any other proceeding seeking liquidation, reorganization or other relief with respect to either Borrower or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in any involuntary case or other proceeding commenced against it.
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c.
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Involuntary Bankruptcy or Insolvency Proceedings. Should proceedings for the appointment of a receiver, trustee, liquidator or custodian of Borrower or of all or a substantial part of the property of Borrower, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to Borrower or the debts of Borrower under any bankruptcy, insolvency or other similar law, now or hereafter in effect, be commenced and not dismissed or discharged within sixty (60) days of commencement.
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d.
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Merger and Other Changes. Without the written consent of Holder, should Borrower merge or consolidate with or into, or convey, transfer, lease, or otherwise dispose of, whether in on transaction or in a series of transaction, all or substantially all of the property and assets (whether now owned or hereafter acquired) of Borrower to, any person, or should any person become the beneficial owner, directly or indirectly, of securities of Borrower representing more than 50% of the total voting power represented by Borrower’s then outstanding voting securities..
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9. Rights of Holder Upon Default. Upon the occurrence or existence of any Event of Default, and after any required notice, or at any time thereafter, Holder immediately may declare all outstanding obligations payable by Borrower hereunder to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived. In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, Holder may exercise any other right, power or remedy granted to it or otherwise permitted to it under this Note, the Security Agreement or by law (either by suit in equity or by action at law, or both).
10. Prepayment. Borrower may prepay this Note without penalty in whole or in part at any time.
11. Successors and Assigns. The rights and obligations of Borrower and Holder under this Note shall be binding upon and benefit the successors, assigns and transferees of the parties. This Note may not be assigned by the Borrower without the prior written consent of Holder. All references in this Note to the “Borrower” and the “Holder” shall be deemed to apply to the Borrower and the Holder, respectively, and to their respective successors and assigns.
12. Waiver and Amendment. Any provision of this Note may only be amended, waived or modified upon the written consent of the Borrower and the Holder.
13. Governing Law. This Note and all actions arising out of or in connection with this Note shall be governed by and construed in accordance with the laws of the State of Colorado, without regard to the conflicts of law provisions of the State of Colorado or of any other state.
14. Miscellaneous.
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i.
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Waives diligence, presentment, demand for payment, notice of dishonor, notice of non-payment, protest, notice of protest, and any and all other demands in connection with the delivery, acceptance, performance, default or enforcement of this Note;
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ii.
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Waives the benefit of any statute of limitations to the maximum extent permitted by law with respect to any action to enforce this Note and any other action related to this Note;
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iii.
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Agrees that no failure on the part of Holder to exercise any power, right or privilege hereunder, or to insist upon prompt compliance with the terms of this Note, will constitute a waiver of that power, right or privilege; and
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iv.
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Agrees that the acceptance at any time by Holder of any past due amounts will not be deemed to be a waiver of the requirement to make prompt payment when due of any other amounts then or hereafter due and payable.
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b.
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THE INDEBTEDNESS EVIDENCED BY THIS NOTE SHALL BE JUNIOR AND SUBORDINATE TO INDEBTEDNESS WHICH BORROWER MAY NOW OR AT ANY TIME HEREAFTER OWE TO ANY LENDER, WHETHER SUCH INDEBTEDNESS NOW EXISTS OR IS HEREAFTER CREATED OR INCURRED, AND WHETHER SUCH INDEBTEDNESS IS FIXED OR CONTINGENT, LIQUIDATED OR UNLIQUIDATED. IN FURTHERANCE HEREOF AND CONSISTENT WITH THIS COVENANT OF SUBORDINATION, HOLDER WILL ENTER INTO WRITTEN SUBORDINATION AGREEMENTS FOR THE BENEFIT OF ANY SUCH LENDERS AS AND WHEN REQUESTED BY SUCH LENDERS; PROVIDED THAT SUCH LENDERS AGREE IN SUCH SUBORDINATION AGREEMENT THAT BORROWER MAY CONTINUE TO PAY ALL AMOUNTS DUE AND PAYABLE UNDER THIS NOTE IF AT THE TIME OF SUCH PAYMENT NO DEFAULT EXISTS OR WILL EXIST AS A RESULT OF SUCH PAYMENT UNDER ANY AGREEMENTS WITH SUCH LENDERS.
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IN WITNESS WHEREOF, the undersigned have hereunto affixed their signatures to this Note effective as of the date first set forth above.
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ENSERVCO CORPORATION
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By:
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Name: Robert Herlin
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Title: Chair, Audit Committee of the Board of Directors
of Enservco Corporation
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Exhibit 99.1
Enservco Corporation Anticipates Filing 2022 First Quarter Financial Statements by August 15, 2022
Company Closes on $1.2 Million Convertible Subordinated Promissory Note with Cross River Partners, LP
LONGMONT, CO – July 18, 2022 – Enservco Corporation (NYSE American: ENSV), a diversified national provider of specialized well-site services to the domestic onshore conventional and unconventional oil and gas industries, today announced it anticipates it will file its 2022 first quarter financial statements by August 15, 2022. The filing was delayed as the Company’s resources were devoted to revising its 2021 Form 10-Qs and in preparing its 2021 Form 10-K.
The Company previously announced that revenue for the first quarter ended March 31, 2022, is expected to increase between 58% and 64% year over year based on higher commodity prices and increased demand for its services. Following the refinancing of its senior credit facility in the first quarter, the Company expects to report first quarter stockholders’ equity well in excess of $6.0 million, in line with NYSE American requirements.
“We are eager to bring our fillings fully current,” said Rich Murphy, Executive Chairman. “Our first quarter of 2022 is expected to show improved results, which will give the Company four consecutive quarters of year-over-year revenue growth. We believe the outlook for the oil and gas industry remains favorable, and we are excited about our prospects going forward.”
Enservco also announced that it has closed on a convertible subordinated promissory note with Cross River Partners, LP, a firm managed by Executive Chairman Rich Murphy. The $1.2 million note has a six-year term and bears interest at 7.75% per annum, paid quarterly. The unsecured note is interest only for the first year with interest and principal payments required thereafter. Under certain circumstances, the note may be converted to Enservco common stock. Additional details on the promissory note will be available in a Form 8-K filing.
About Enservco
Through its various operating subsidiaries, Enservco provides a 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, West Virginia, Utah, Michigan, Illinois, Florida, New Mexico and Louisiana. Additional information is available at www.enservco.com.
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 contained in this release using the terms “believes,” "may," “intends,” "expects to," and other terms 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, 2021, and subsequently filed documents with the SEC. Forward looking statements in this news release include ability of the Company to file its first quarter Form 10-Q by August 15, 2022; the ability to report year over year revenue growth for the first quarter of 2022; ability to bring its filings current; ability to report first quarter stockholders’ equity in excess of $6.0 million; and potential for a continued favorable industry outlook and good prospects for the Company. Enservco disclaims any obligation to update any forward-looking statement made herein, except as required by law.
Contact:
Mark Patterson
SVP
Enservco Corporation
mpatterson@enservco.com
Pfeiffer High Investor Relations, Inc.
Jay Pfeiffer
Phone: 303-880-9000
Email: jay@pfeifferhigh.com
