	For the Three Months Ended
	March 31,
	2021			2020

Revenues
Production services	$	1,844		$	3,202
Completion and other services		3,299			6,184
Total revenues		5,143			9,386

Expenses
Production services		1,967			3,494
Completion and other services		3,142			4,971
Sales, general, and administrative expenses		1,005			1,762
Loss on disposal of assets		51			15
Depreciation and amortization		1,336			1,396
Total operating expenses		7,501			11,638

Loss from Operations		(2,358	)		(2,252	)

Other (expense) income
Interest expense		(33	)		(641	)
Other income		226			20
Total other income (expense)		193			(621	)

Loss from continuing operations before taxes		(2,165	)		(2,873	)
Income tax expense		-			-
Loss from continuing operations		(2,165	)		(2,873	)
(Loss) income from discontinued operations (Note 5)		(8	)		36
Net loss	$	(2,173	)	$	(2,837	)


Loss from continuing operations per common share - basic and diluted	$	(0.24	)	$	(0.78	)
(Loss) income from discontinued operations per common share - basic and diluted		-			0.01
Net loss per share - basic and diluted	$	(0.24	)	$	(0.77	)

Weighted average number of common shares outstanding - basic and diluted		9,187			3,701

For the Three Months Ended

March 31,

2020

2019

Revenues

Production services

$
3,202

$
4,116

Completion services

6,184

20,696

Total revenues

9,386

24,812

Expenses

Production services

3,494

3,346

Completion services

4,971

12,020

Sales, general, and administrative expenses

1,762

1,602

Patent litigation and defense costs

-

9

Loss on disposal of assets 15 -
Impairment loss - 127
Depreciation and amortization

1,396

1,400

Total operating expenses

11,638

18,504

(Loss) Income from Operations

(2,252
)

6,308

Other (Expense) Income

Interest expense

(641
)

(884
)
Other income (expense)

20

(65
)
Total other expense

(621
)

(949
)

(Loss) Income from continuing operations before tax benefit
(2,873
)

5,359

Income tax expense

-

-

(Loss) Income from continuing operations

$
(2,873
)

$
5,359

Discontinued operations (Note 6)
Income (Loss) from operations of discontinued operations 36 (1,056 )
Income tax benefit - -
Income (Loss) from discontinued operations 36 (1,056 )
Net (loss) income $ (2,837 ) $ 4,303

(Loss) Earnings from continuing operations per common share - basic

$
(0.05
)

$
0.10

Loss from discontinued operations per common share - basic - (0.02 )
Net (loss) income per share - basic $ (0.05 ) $ 0.08

(Loss) Earnings from continuing operations per common share - diluted $ (0.05 ) $ 0.10
Loss from discontinued operations per common share - diluted - (0.02 )
Net (loss) earnings per share - diluted

$
(0.05
)

$
0.08

Basic weighted average number of common shares outstanding

55,518

54,266

Add: Dilutive shares

-

951

Diluted weighted average number of common shares outstanding

55,518

55,217

See notes to condensed consolidated financial statements.

ENSERVCO CORPORATION AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity (Deficit)

(In thousands)

(Unaudited)

	Common Shares			Common Stock		Additional Paid-in Capital		Accumulated Deficit			Total Stockholders’ Equity (Deficit)

Balance at January 1, 2020		3,703		$	19	$	22,325	$	(25,020	)	$	(2,676	)
Stock-based compensation		-			-		39		-			39
Restricted share cancellation		(2	)		-		-		-			-
Net loss		-			-		-		(2,837	)		(2,837	)
Balance at March 31, 2020		3,701		$	19	$	22,364	$	(2,837	)	$	(5,474	)

Common
Shares

Common
Stock

Additional
Paid-in
Capital

Accumulated
Earnings
(Deficit)

Total
Stockholders’
Equity

Balance at January 1, 2019

54,286

$
271

$
21,797

$
(17,466
)

$
4,602

Opening balance adjustment - - - 108 108
Stock-based compensation, net of issuance costs

-

-

92

-

92

Restricted share cancellation (55 ) - - - -
Net income - - - 4,303 4,303
Balance at March 31, 2019

54,231

$
271

$
21,889

$
(13,055
)

$
9,105

	Common Shares		Common Stock		Additional Paid-in Capital		Accumulated Deficit			Total Stockholders’ Equity

Balance at January 1, 2021		6,301	$	32	$	30,052	$	(27,529	)	$	2,555
Stock-based compensation		-		-		24		-			24
Shares issued in offering, net of issuance costs		4,200		21		8,824		-			8,845
Shares issued to Cross River Partners, L.P. in subordinated debt and accrued interest conversion, net of discount		602		3		1,246		-			1,249
Restricted share issuances		330		1		310		-			311
Net loss		-		-		-		(2,173	)		(2,173	)
Balance at March 31, 2021		11,433	$	57	$	40,456	$	(29,702	)		10,811

Common
Shares

Common
Stock

Additional
Paid-in
Capital

Accumulated
Earnings
(Deficit)

Total
Stockholders’
Equity

Balance at January 1, 2020

55,539

$
278

$
22,066

$
(25,020
)

$
(2,676
)
Stock-based compensation, net of issuance costs

-

-

39

-

39

Restricted share cancellation (30 ) (3 ) 3 - -
Net loss - - - (2,837 ) (2,837 )
Balance at March 31, 2020

55,509

$
275

$
22,108

$
(27,857
)

(5,474
)

See accompanying notes to consolidated financial statements.

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ENSERVCO CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	For the Three Months Ended						For the Three Months Ended
	March 31,						March 31,
	2020			2019			2021			2020
OPERATING ACTIVITIES
Net (loss) income	$	(2,837	)	$	4,303
Net income (loss) from discontinued operations		36			(1,056	)
Net (loss) income from continuing operations		(2,873	)		5,359
Adjustments to reconcile net (loss) income to net cash used in operating activities
Net loss							$	(2,173	)	$	(2,837	)
Net (loss) income from discontinued operations								(8	)		36
Net loss from continuing operations								(2,165	)		(2,873	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		1,396			1,400			1,336			1,396
Loss on disposal of equipment		15			-			51			15
Impairment loss		-			127
Board compensation issued in equity								311			-
Stock-based compensation		39			92			24			39
Amortization of debt issuance costs and discount		47			179			8			47
Provision for bad debt expense		300			-			38			300
Changes in operating assets and liabilities
Accounts receivable		429			(11,199)			(1,476	)		429
Inventories		39			118			(39	)		39
Prepaid expense and other current assets		333			124			(113	)		333
Amortization of operating lease assets		230			-			210			230
Other assets		15			69			2			15
Accounts payable and accrued liabilities		(869	)		1,069			(556	)		(869	)
Operating lease liabilities		(204	)		-			(206	)		(204	)
Other liabilities		-			84			(45	)		-
Net cash used in operating activities - continuing operations		(1,103	)		(2,578	)		(2,620	)		(1,103	)
Net cash provided by (used in) operating activities - discontinued operations		134			(68	)
Net cash used in - operating activities		(969	)		(2,646	)
Net cash (used in) provided by operating activities - discontinued operations								(2	)		134
Net cash used in operating activities								(2,622	)		(969	)

INVESTING ACTIVITIES
Purchases of property and equipment		(164	)		(123	)		(45	)		(164	)
Proceeds from disposals of property and equipment		-			155			13			-
Net cash (used in) provided by investing activities - continuing operations		(164	)		32
Net cash provided by (used in) investing activities - discontinued operations		178			553
Net cash provided by investing activities		14			585
Net cash used in investing activities - continuing operations								(32	)		(164	)
Net cash provided by investing activities - discontinued operations								-			178
Net cash (used in) provided by investing activities								(32	)		14

FINANCING ACTIVITIES
Net line of credit borrowings		595			2,016
Gross proceeds from stock issuance								9,660			-
Stock issuance costs and registration fees								(815	)		-
Term loan repayment								(3,000	)		-
Net line of credit (repayments) borrowings								(701	)		595
TDR accrued future interest payments								(209	)		-
Repayment of long-term debt		(23	)		(11	)		(25	)		(23	)
Payments of finance leases		(30	)		-			(22	)		(30	)
Repayment of note		-			(200	)
Other financing activities		-			(1	)
Net cash provided by financing activities - continuing operations		542			1,804			4,888			542
Net cash used in financing activities - discontinued operations		(33	)		-			(1	)		(33	)
Net cash provided by financing activities		509			1,804			4,887			509

Net Increase (Decrease) in Cash and Cash Equivalents		(446	)		(257	)		2,233			(446	)

Cash and Cash Equivalents, beginning of period		663			257			1,467			663

Cash and Cash Equivalents, end of period	$	217		$	-		$	3,700		$	217


Supplemental Cash Flow Information:
Cash paid for interest	$	537		$	595		$	220		$	537
Supplemental Disclosure of Non-cash Investing and Financing Activities:
Non-cash proceeds from revolving credit facilities	$	-		$	39
Non-cash conversion of subordinated debt and accrued interest to common stock							$	1,312		$	-
Non-cash conversion of unamortized subordinated debt discount								61			-

Note 1 – Basis of Presentation

Enservco Corporation (“Enservco”) through its wholly-owned subsidiaries (collectively referred to as the “Company”, “we” or “us”) provides various services to the domestic onshore oil and natural gas industry. These services include frac water heating (completion and other services) and hot oiling and acidizing (production services).

The accompanying unaudited condensed consolidated financial statements have been derived from the accounting records of Enservco Corporation, Heat Waves Hot Oil Service LLC (“Heat Waves”), Dillco Fluid Service, Inc. (“Dillco”), Heat Waves Water Management LLC (“HWWM”), and Adler Hot Oil Service, LLC ("Adler") (collectively, the “Company”) as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020 and the results of operations for the three months ended March 31, ~~2020~~2021 and ~~2019.~~2020.

The below table provides an overview of the Company’s current ownership hierarchy:

Name	State of Formation	Ownership	Business
Heat Waves Hot Oil Service LLC	Colorado	100% by Enservco	Oil and natural gas well services, including logistics and stimulation.

Adler Hot Oil Service, LLC	Delaware	100% by Enservco	Operations integrated into Heat Waves during 2019.

Heat Waves Water Management LLC	Colorado	100% by Enservco	Discontinued operations in 2019

Dillco Fluid Service, Inc	Kansas	100% by Enservco	Discontinued operation in 2018

HE Services LLC	Nevada	100% by Heat Waves	No active business operations. ~~Owns~~Owned construction equipment used by Heat Waves. HE Services LLC was dissolved on December 23, 2020.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the disclosures required by generally accepted accounting principles in the United States for complete financial statements. In the opinion of management, all ~~of the~~ normal and recurring adjustments necessary to fairly present the interim financial information set forth herein have been included. The results of operations for interim periods are not necessarily indicative of the operating results of a full year or of future years.

The accompanying unaudited condensed consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and follow the same accounting policies and methods of their application as the most recent annual financial statements. These interim financial statements should be read in conjunction with the financial statements and related footnotes included in the Annual Report on Form 10-K of Enservco Corporation for the year ended December 31, ~~2019.~~2020. All inter-company balances and transactions have been eliminated in the accompanying condensed consolidated financial statements.

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Note 2 - Summary of Significant Accounting Policies

~~Going Concern~~Recent Developments

~~Our financial statements have been prepared on~~On August 10, 2017, we entered into the going concern basis, which contemplates the continuity of normal business activities and the realization of assets and settlement of liabilities in the normal course of business. We incurred a net loss of $7.7 million for the year ended December 31, 2019 and have incurred a net loss of $2.8 million for the three months ended March 31, 2020. As of the balance sheet date of this report we had total current liabilities of $41.8 million, which exceeded our total current assets of $7.0 million by $34.8 million. We are in breach of two of our covenants under our2017 Credit Agreement, as amended, with East West Bank (the "2017 Credit Agreement") which provided for a three-year, $37.0 million senior secured revolving credit facility (the "Credit Facility"). On September 23, 2020, the Company and East West Bank entered into the Fifth Amendment to Loan and Security Agreement and Waiver (the "Fifth Amendment") which, among other things, provided for a loan concession of $16.0 million in exchange for 533,334 shares of Company common stock and a warrant to purchase up to 1,000,000 additional shares of Company common stock in the future, as well as further extending the maturity date for the repayment of the Credit Facility to October 15, 2021. On February 1, 2021, we entered into the Sixth Amendment to Loan and Security Agreement (the "Sixth Amendment") which extended the maturity date of the loan for an additional year to October 15, 2022, and modified certain covenants. On April 26, 2021, we entered into the Seventh Amendment to Loan and Security Agreement (the "Seventh Amendment") which provided for amortization of the loan on a 10-year straight-line basis commencing on November 15, 2021. As the terms of the Seventh Amendment were contemplated prior to March 31, 2021, the principal payments due over the next twelve months have ~~failed~~been classified as current on the consolidated balance sheets as of March 31, 2021.

On August 13, 2020, the Company's Board of Directors approved a transaction to ~~pay an overadvance that occurred~~exchange 50%, or $1.25 million, of our subordinated debt with Cross River Partners, L.P., a related party, as well as $265,000 in ~~October 2019 that has continued through~~accrued interest, for 403,602 shares of Company common stock. This transaction was finalized on September 15, 2020. On February 3, 2021, Cross River Partners, L.P. converted the remaining principal amount of such subordinated debt, or $1.25 million, as well as $62,000 in accrued interest, for 601,674 shares of Company common stock, at a conversion price equal to $2.18 per share, which was the closing price of the Company's stock reported on the NYSE American on the date of ~~this report (as discussed~~the conversion. In connection with such conversion, the Company issued a warrant to Cross River Partners, L.P. to purchase up to 150,418 additional shares of Company common stock in ~~Note 7~~the future at an exercise price of $2.507 per share. The warrant for the 150,418 shares has a five-year term and is exercisable beginning February 3, 2022 until February 3, 2026.

On September 28, 2020, the Company filed a final prospectus to its registration statement on Form S-3 (the "Shelf Registration Statement") that was filed with the Securities and Exchange Commission (the "SEC") on July 24, 2020, and declared effective on August 20, 2020. On September 29, 2020, pursuant to the Shelf Registration Statement, the Company, through its sales agent Alliance Global Partners ("AGP"), commenced an at-the-market offering (the "ATM Offering") which was designed to raise capital by issuing securities into the trading market, over-time, at the then-market price of the ~~accompanying Notes~~securities at the time they are sold. The Company sold 1,694,219 shares of Company common stock in the ATM Offering and collected net proceeds of $3.5 million.

On February 8, 2021, the Company entered into an Underwriting Agreement with AGP for a firm commitment underwritten public offering of the Company’s common stock pursuant to a registration statement on Form S-1 originally filed with the SEC on January 21, 2021 and declared effective on February 8, 2021 (the "February 2021 Public Offering"). Pursuant to the ~~Condensed Consolidated Financial Statements), resulting~~Underwriting Agreement, the Company issued and sold 4,199,998 shares of Company common stock, including shares issued and sold pursuant to AGP’s over-allotment option, at a public offering price of $2.30 per share. The Company collected net proceeds of $8.8 million in ~~our borrowings payable of $37.0~~the February 2021 Public Offering, which closed on February 10, 2021. The Company made a $3.0 million ~~being classified in current liabilities.~~

~~Our ability to continue as a going concern is dependent~~principal payment on the ~~renegotiation~~Credit Facility upon the closing of the 2017 Credit Agreement and/or raising further capital and our ability to further reduce costs, of which there can be no assurance. These factors raise substantial doubt over our ability to continue as a going concern and whether we will realize our assets and extinguish our liabilities in the normal course of business and at the amounts stated in the financial statements. Given our current financial situation we may be required to accept terms on the transactions that we are seeking that are onerous to us.

~~Given our current financial situation we may be required to accept terms on transactions, if any, that we are seeking that are onerous to us.~~February 2021 Public Offering.

Recent Market Conditions

The COVID-19 pandemic has significantly impacted the world economic conditions including in the United States, with ~~accelerated~~significant effects beginning in February 2020, and continuing through the issuance of this report, as federal, state and local governments react to the public health crisis, creating significant uncertainties relating to the United States economy. Consequently, the Company has experienced and expects to further experience a material adverse impact on its revenues, results of operations and cash flows. COVID-19 related quarantines and business restrictions have had a depressing impact on United States oil demand, and hence our business, which continues through the filing date of this report. The situation iscontinues to change rapidly ~~changing~~ and additional impacts to our business may arise that we are not aware of currently. We cannot predict whether, when or the manner in which the conditions surrounding COVID-19 will change including the timing of lifting any restrictions or office closure requirements.

In addition, certain producing countries within the Organization of Petroleum Exporting Countries and their allies ("OPEC+") group ~~have~~ attempted to increase market share through pricing activity that has ~~contributed to a~~had limited impact on the severe decline in domestic oil prices that occurred during the first quarter of 2020, and ~~correspondingly,~~ drilling and operating activity within our ~~markets. Subsequent to~~markets has remained depressed. There is no assurance that such efforts will not re-occur in the ~~end of the quarter, OPEC+ countries have reportedly agreed to cooperate in limited and short-term production cuts, the impact of which is uncertain at this time.~~future.

The full extent of the impact of COVID-19 and OPEC+ actions on our operations and financial performance depends on future developments that are uncertain and unpredictable, including the duration and spread of the pandemic, its impact on capital and financial markets, any new information that may emerge concerning the severity of the virus, its spread to other regions as well as the actions taken to contain it, production response of domestic oil producers to lower oil prices, and the adherence to and continuity of OPEC+ production cuts, among others.

Cash and Cash Equivalents

The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. The Company continually monitors its positions with, and the credit quality of, the financial institutions with which it invests. Enservco maintains its excess cash in various financial institutions, where deposits may exceed federally insured amounts at times.

Accounts Receivable

Accounts receivable are stated at the amounts billed to customers, net of an allowance for uncollectible accounts. The Company provides an allowance for uncollectible accounts based on a review of outstanding receivables, historical collection information and existing economic conditions. The allowance for uncollectible amounts is continually reviewed and adjusted to maintain the allowance at a level considered adequate to cover future losses. The allowance is management's best estimate of uncollectible amounts and is determined based on historical collection experience related to accounts receivable coupled with a review of the current status of existing receivables. The losses ultimately incurred could differ materially in the near term from the amounts estimated in determining the allowance. As of March 31, ~~2020,~~2021, and December 31, ~~2019,~~2020, the Company had an allowance for doubtful accounts of approximately ~~$571,000~~$359,000 and ~~$246,000,~~$322,000, respectively. For the three months ended March 31, 2021 and 2020, the Company recorded approximately $38,000 and $300,000 to bad debt ~~expense. For the three months ended March 31, 2019, the Company did not record any bad debt expense.~~expense, respectively.

Inventories

Inventory consists primarily of propane, diesel fuel and chemicals that are used in the servicing of oil wells and is carried at the lower of cost or net realizable value in accordance with the first in, first out method (FIFO). The Company periodically reviews the value of items in inventory and provides write-downs or write-offs, of inventory based on its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold. For the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, the Company did not recognize any write-downs or write-offs of inventory.

Table of Contents

Property and Equipment

Property and equipment ~~consists~~consist of (i) trucks, trailers and pickups; (ii) water transfer pumps, pipe, lay flat hose, trailers, and other support equipment; (iii) real property which includes land and buildings used for office and shop facilities and wells used for the disposal of water; (iv) other equipment such as tools used for maintaining and repairing vehicles, and (v) office furniture and fixtures, and computer equipment. Property and equipment is stated at cost less accumulated depreciation. The Company capitalizes interest on certain qualifying assets that are undergoing activities to prepare them for their intended use. Interest costs incurred during the fabrication period are capitalized and amortized over the life of the assets. The Company did not capitalize any interest during the three months ended March 31, 2021 or 2020. The Company charges repairs and maintenance against income when incurred and capitalizes renewals and betterments, which extend the remaining useful life, expand the capacity or efficiency of the assets. Depreciation is recorded on a straight-line basis over estimated useful lives of 5 to 30 years.

Any difference between net book value of the property and equipment and the proceeds of an assets’ sale or settlement of an insurance claim is recorded as a gain or loss in the Company’s earnings.

Leases

The Company assesses whether an arrangement is a lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet. We have elected the practical expedient to not separate lease and non-lease components for all assets. Operating lease assets and operating lease liabilities are calculated based on the present value of the future minimum lease payments over the lease term at the lease start date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease start date in determining the present value of future payments. The operating lease asset is increased by any lease payments made at or before the lease start date and reduced by lease incentives and initial direct costs incurred. The lease term includes options to renew or terminate the lease when it is reasonably certain that we will exercise that option. The exercise of lease renewal options is at our sole discretion. The depreciable life of lease assets and leasehold improvements are limited by the lease term. Lease expense for operating leases is recognized on a straight-line basis over the lease term.

The Company conducts a major part of its operations from leased facilities. Each of these leases is accounted for as an operating lease. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets.

The Company amortizes leasehold improvements over the shorter of the life of the lease or the life of the improvements.

The Company has leased trucks and equipment in the normal course of business, which may be recorded as operating or ~~financing~~finance leases, depending on the term of the lease. The Company recorded

rental expense on equipment under operating leases over the lease term as it becomes payable; there were no rent escalation terms associated with these equipment leases. The Company records amortization expense on equipment under ~~financing~~finance leases on a straight-line basis as well as interest expense based on our implicit borrowing rate at the date of the lease inception. The equipment leases contain purchase options that allow the Company to purchase the leased equipment at the end of the lease term, based on the market price of the equipment at the time of the lease termination.

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Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recovered. During the first quarter of 2021, the Company concluded that there were no further triggering events which could indicate impairment of its long-lived assets. During the first quarter of 2020, the combination of the COVID-19 pandemic and actions taken by the OPEC+ countries caused oil and gas commodity demand to decrease significantly. The Company determined that these were triggering events which could indicate impairment of its long-lived assets. The Company reviewed both qualitative and quantitative aspects of the business during the analysis of impairment. During the quantitative review, the Company reviews the undiscounted future cash flows in its assessment of whether long-lived assets have been impaired. The Company determined that there was no impairment of its long-lived assets during the three months ended March 31, ~~2020.~~2021.

Assets Held for Sale

The Company classifies long-lived assets to be sold as held for sale in the period in which all of the following criteria are met: (1) management, having the authority to approve the action, commits to a plan to sell the asset or disposal group; (2) the asset or disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets; (3) an active program to locate a buyer and other actions required to complete the plan to sell the asset or disposal group have been initiated; (4) the sale of the asset or disposal group is probable, and transfer of the asset or disposal group is expected to qualify for recognition as a completed sale within one year, except if events or circumstances beyond our control extend the period of time required to sell the asset or disposal group beyond one year; (5) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (6) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

We initially measure a long-lived asset or disposal group that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held-for-sale criteria are met. Conversely, gains are not recognized on the sale of a long-lived asset or disposal group until the date of sale. We assess the fair value of a long-lived asset or disposal group less any costs to sell each reporting period it remains classified as held for sale and report any subsequent changes as an adjustment to the carrying value of the asset or disposal group, as long as the new carrying value does not exceed the carrying value of the asset at the time it was initially classified as held for sale. During the years three months ended March 31, ~~2019,~~2021 and 2020, the Company recorded no impairment charges on its held for sale assets.

Upon determining that a long-lived asset or disposal group meets the criteria to be classified as held for sale, the Company ceases depreciation and reports long-lived assets and/or the assets and liabilities of ~~approximately $127,000 related to its saltwater~~the disposal ~~wells which it expects to divest during 2020.~~group, if material, in the line items assets held for sale in our consolidated balance sheets.

Goodwill and Other Intangible Assets

Goodwill represents the excess purchase price over the fair value of identifiable assets received attributable to business acquisitions and combinations. Goodwill and other intangible assets are measured for impairment at least annually and/or whenever events and circumstances arise that indicate impairment may exist, such as a significant adverse change in the business climate. In assessing the value of goodwill, assets and liabilities are assigned to the reporting units and the appropriate valuation methodologies are used to determine fair value at the reporting unit level. Identified intangible assets are amortized using the straight-line method over their estimated useful lives.

During the first quarter of 2021, the Company concluded that there were no further triggering events which could indicate impairment of its goodwill and other intangible assets. During the first quarter of 2020, the combination of the COVID-19 pandemic and actions taken by the OPEC+ countries caused oil and gas commodity demand to decrease significantly. The Company determined that these were triggering events which could indicate impairment of its goodwill and other intangible assets. The Company reviewed both qualitative and quantitative aspects of the business during the analysis of impairment. During the quantitative review, the Company ~~reviews~~uses both the ~~undiscounted~~fair value and discounted future cash flows in its assessment of whether goodwill and other intangible assets have been impaired. The Company determined that there was no impairment of its goodwill and other intangible assets during the three months ended March 31, 2020.

Revenue Recognition

We have adopted Accounting Standards Update 2014-09, Revenue - Revenue from Contracts with Customers, Accounting Standards Codification ("ASC") Topic 606, beginning January 1, 2018, using the modified retrospective approach, which we have applied to contracts within the scope of the standard. There was no material impact on the Company's condensed consolidated financial statements from adoption of this new standard. The Company evaluates revenue when we can identify the contract with the customer, the performance obligations in the contract, the transaction price, and we are certain that the performance obligations have been met. Revenue is recognized when the service has been provided to the customer. The vast majority of the Company's services and product offerings are short-term in nature. The time between invoicing and when payment is due under these arrangements is generally 30 to 60 days. Revenue is not generated from contractual arrangements that include multiple performance obligations.

The Company’s agreements with its customers are often referred to as “price sheets” and sometimes provide pricing for multiple services. However, these agreements generally do not authorize the performance of specific services or provide for guaranteed throughput amounts. As customers are free to choose which services, if any, to use based on the Company’s price sheet, the Company prices its separate services on the basis of their standalone selling prices. Customer agreements generally do not provide for performance, cancellation, termination, or refund type provisions. Services based on price sheets with customers are generally performed under separately issued “work orders” or “field tickets” as services are requested.

Revenue is recognized for certain projects that take more than one day projects over time based on the number of days during the reporting period and the agreed upon price as work progresses on each project.

Disaggregation of revenue

See Note 1311 - Segment Reporting for disaggregation of revenue.

Earnings (Loss) Per Share

Earnings per Common Share - Basic is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Earnings per Common Share - Diluted earnings is calculated by dividing net income (loss) by the diluted weighted average number of common shares. The diluted weighted average number of common shares is computed using the treasury stock method for common stock that may be issued for outstanding stock options, restricted stock and warrants.

As of March 31, ~~2020~~2021 and ~~2019~~2020, there were outstanding stock options, unvested restricted stock awards and warrants to acquire an aggregate of ~~2,390,335~~1,383,489 and ~~2,378,499~~247,048 shares of Company common stock, respectively, which have a potentially dilutive impact on earnings per share. As of March 31, 2021 and 2020, ~~these~~the outstanding stock options and warrants had no aggregate intrinsic value (the difference between the estimated fair value of the Company’s common stock on March 31, 2021 and 2020, and the exercise price, multiplied by the number of in-the-money instruments)~~of outstanding stock options~~. Dilution is not permitted if there are net losses during the period. As such, the Company does not show diluted earnings per share for the three months ended March 31, 2021 and ~~warrants.~~2020.

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~~Derivative Instruments~~

~~From time to time, the Company has~~ interest rate swap agreements in place to hedge against changes in interest rates. The fair value of the Company’s derivative instrument is reflected as an asset or liability on the balance sheet. The accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative instrument and the resulting designation. Transactions related to the Company’s derivative instruments accounted for as hedges are classified in the same category as the item hedged in the consolidated statement of cash flows. The Company did ~~not~~ ~~hold derivative instruments at March~~ ~~31, 2020~~ or ~~December 31, 2019,~~ ~~for trading purposes.~~

On ~~February 23, 2018,~~ ~~we entered into an interest rate swap agreement with East West Bank in order to hedge against the variability in cash flows from future interest payments related to the~~ ~~2017~~ ~~Credit Agreement. The terms of the interest rate swap agreement included an initial notional amount of~~ ~~$10.0~~ ~~million, a fixed payment rate of~~ ~~2.52% paid by us and a floating payment rate equal to LIBOR paid by East West Bank.~~ The purpose of the swap agreement is to adjust the interest rate profile of our debt obligations. The fair value of the interest rate swap agreement is recorded in Other Liabilities and changes to the fair value are recorded to Other Expense.

Income Taxes

The Company recognizes deferred tax liabilities and assets based on the differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements that will result in taxable or deductible amounts in future years. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities will be recognized in income in the period that includes the enactment date. A deferred tax asset or liability that is not related to an asset or liability for financial reporting is classified according to the expected reversal date. The Company records a valuation allowance to reduce deferred tax assets to an amount that it believes is more likely than not expected to be realized.

The Company accounts for any uncertainty in income taxes by recognizing the tax benefit from an uncertain tax position only if, in the Company’s opinion, it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company measures the tax benefits recognized in the financial statements from such a position based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and are often ambiguous. As such, the Company is required to make many subjective assumptions and judgments regarding income tax exposures. Interpretations of and guidance surrounding income tax law and regulations change over time and may result in changes to the Company’s subjective assumptions and judgments which can materially affect amounts recognized in the consolidated balance sheets and consolidated statements of income. The result of the reassessment of the Company’s tax positions did not have an impact on the consolidated financial statements.

Interest and penalties associated with tax positions are recorded in the period assessed as Other expense. The Company files income tax returns in the United States and in the states in which it conducts its business operations. The Company’s United States federal income tax filings for tax years ~~2016~~2017 through ~~2019~~2020 remain open to examination. In general, the Company’s various state tax filings remain open for tax years ~~2015~~2016 to ~~2019.~~2020.

In response to the COVID-19 pandemic, many governments have enacted or are contemplating measures to provide aid and economic stimulus. These measures may include deferring the due dates of tax payments or other changes to their income and non-income-based tax laws. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020 in the U.S., includes measures to assist companies, including temporary changes to income and non-income-based tax laws. For the three months ended March 31, 2020, there were no material tax impacts to our condensed consolidated financial statements relating to COVID-19 measures. We continue to monitor additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service, and others.

Fair Value

The Company follows authoritative guidance that applies to all financial assets and liabilities required to be measured and reported on a fair value basis. The Company also applies the guidance to non-financial assets and liabilities measured at fair value on a nonrecurring basis, including non-competition agreements and goodwill. The guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.

Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability based on the best information available in the circumstances. Beginning in 2017 the Company valued its warrants using the Binomial Lattice model ("Lattice"). Specific inputs used in the Lattice are the underlying stock price, the exercise price of the warrant, expected dividends, historical volatility, term to expiration and risk-free interest rates. The Company did not have any transfers between hierarchy levels during the three months ended March 31, ~~2020~~2021. The financial and nonfinancial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement.

The hierarchy is broken down into three levels based on the reliability of the inputs as follows:

Level 1:

Quoted prices are available in active markets for identical assets or liabilities;

Level 2:

Quoted prices in active markets for similar assets and liabilities that are observable for the asset or liability; or

Level 3:

Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash flow models or valuations.

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Stock-based Compensation

Stock-based compensation cost is measured at the date of grant, based on the calculated fair value of the award as described below, and is recognized over the requisite service period, which is generally the vesting period of the equity grant.

The Company uses the Black-Scholes pricing model as a method for determining the estimated grant date fair value for all stock options awarded to employees, independent contractors, officers, and directors. The expected term of the options is based upon evaluation of historical and expected exercise behavior. The risk-free interest rate is based upon U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life of the grant. Volatility is determined upon historical volatility of our stock and adjusted if future volatility is expected to vary from historical experience. The dividend yield is assumed to be none as we have not paid dividends, nor do we anticipate paying any dividends in the foreseeable future.

The Company uses a Lattice model to determine the fair value of certain warrants. The expected term used was the remaining contractual term. Expected volatility is based upon historical volatility over a term consistent with the remaining term. The risk-free interest rate is derived from the yield on zero-coupon U.S. government securities with a remaining term equal to the contractual term of the warrants. The dividend yield is assumed to be zero.

The Company used the market-value of Company stock to determine the fair value of the performance-based restricted stock awarded in 2018 and 2019. ~~The fair-value~~Stock based compensation is updated quarterly based on actual forfeitures.

The Company used either a ~~lattice~~Lattice model or the Black-Scholes pricing model to determine the fair value of market-based restricted stock awarded in ~~2020~~2021 and ~~2019.~~2020.

Management Estimates

The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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 estimates include the realization of accounts receivable, evaluation of impairment of long-lived assets, stock-based compensation expense, income tax provision ~~the valuation of warrant liability and the Company's interest rate swaps,~~ and the valuation of deferred taxes. Actual results could differ from those estimates.

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Reclassifications

Certain prior-period amounts have been reclassified for comparative purposes to conform to the current presentation. These reclassifications have no effect on the Company’s consolidated statement of operations.

~~Business Combinations~~

We recognize and measure the assets acquired and liabilities assumed in a business combination based on their estimated fair values at the acquisition date, with any remaining difference recorded as goodwill or gain from a bargain purchase. For material acquisitions, management typically engages an independent valuation specialist to assist with the determination of fair value of the assets acquired, liabilities assumed, noncontrolling interest, if any, and goodwill, based on recognized business valuation methodologies. If the initial accounting for the business combination is incomplete by the end of the reporting period in which the acquisition occurs, an estimate will be recorded. Subsequent to the acquisition, and not later than one year from the acquisition date, we will record any material adjustments to the initial estimate based on new information obtained about facts and circumstances that existed as of the acquisition date. An income, market or cost valuation method may be utilized to estimate the fair value of the assets acquired, liabilities assumed, and noncontrolling interest, if any, in a business combination. The income valuation method represents the present value of future cash flows over the life of the asset using: (i) discrete financial forecasts, which rely on management’s estimates of volumes, commodity prices, revenue and operating expenses; (ii) long-term growth rates; and (iii) appropriate discount rates. The market valuation method uses prices paid for a reasonably similar asset by other purchasers in the market, with adjustments relating to any differences between the assets. The cost valuation method is based on the replacement cost of a comparable asset at prices at the time of the acquisition reduced for depreciation of the asset. See Note 4 – Business Combinations~~for additional information regarding our business combinations.~~

~~Recently Adopted~~ Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases, which introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The update is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those reporting periods, with early adoption permitted. The original guidance required application on a modified retrospective basis with the earliest period presented. In August 2018, the FASB issued ASU 2018-11, Targeted Improvements to ASC 842, Leases, which includes an option to not restate comparative periods in transition and elect to use the effective date of ASC 842, Leases, as the date of initial application of transition. Based on the effective date, the Company adopted this ASU beginning on January 1, 2019 and elected the transition option provided under ASU 2018-11. This standard had a material effect on our consolidated balance sheet with the recognition of new right of use assets and lease liabilities for all operating leases, as these leases typically have a non-cancelable lease term of greater than one year. Upon adoption, both assets and liabilities on our consolidated balance sheets increased by approximately $2.4 million. The Company elected a package of transition practical expedients which include not reassessing whether any expired or existing contracts are or contain leases, not reassessing the lease classification of expired or existing leases, and not reassessing initial direct costs for existing leases. The Company also elected a practical expedient to not separate lease and non-lease components. The Company did not elect the practical expedient to use hindsight in determining the lease terms or assessing impairment of the Right-of-Use (‘ROU”) assets. See Note 10 - Commitments and Contingencies for more information.

In June 2016, the FASB issued ASU 2016-13, Financial Statements - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires a consideration of a broader range of reasonable and supportable information to ascertain credit loss estimates. The standard is effective for fiscal years beginning after December 15, 2022. The Company does not expect the adoption of ASU 2016-13 to have a material impact on its consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles of Topic 740, and improves consistent application by clarifying and amending existing guidance. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. The standard is effective for fiscal years beginning after December 15, 2020. The Company adopted ASU 2019-12 on January 1, 2021, and the adoption did not have a material impact on its consolidated financial statements.

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Note 3 - Property and Equipment

Property and equipment consist of the following (amounts in thousands):

	March 31,			December 31,			March 31,			December 31,
	2020			2019			2021			2020

Trucks and vehicles	$	59,791		$	59,788		$	57,090		$	57,224
Other equipment		1,301			1,303			1,324			1,319
Buildings and improvements		3,184			3,184			3,176			3,176
Land		378			378			378			378
Total property and equipment		64,654			64,653			61,968			62,097
Accumulated depreciation		(39,204	)		(38,033	)		(42,933	)		(41,780	)
Property and equipment, net	$	25,450		$	26,620		$	19,035		$	20,317

For the three months ended March 31, 2021 and 2020, the Company recorded depreciation expense of approximately $1.3 million and $1.4 million, respectively.

~~Note 4 – Business Combinations~~

~~Acquisition of Adler Hot Oil Service, LLC~~

On October 26, 2018, Enservco Corporation entered into a Membership Interest Purchase Agreement (the “Agreement”) with Adler Hot Oil Holdings, LLC, a Delaware limited liability company (the “Seller”), pursuant to which Enservco acquired all of the outstanding membership interests of Adler Hot Oil Service, LLC, a Delaware limited liability company (“Adler”) for a gross aggregate purchase price of $12.5 million, plus approximately $500,000 in working capital adjustments (the “Transaction”). The purchase price allocation differs from the gross aggregate purchase price due to fair value adjustments to the indemnity holdback, earnout, plus the discount on the subordinated note. Certain former members of Adler are also parties to the Agreement. Adler is a provider of frac water heating and hot oiling services, whose assets consist primarily of vehicles and equipment, with a complementary base of customers in several oil and gas producing basins where Enservco operates.

The consideration paid or to be paid by Enservco under the Agreement originally included: (i) $3.7 million in cash paid to or for the benefit of the Seller at the closing; (ii) a subordinated promissory note issued to the Seller in the principal amount of $4.8 million, plus interest accrued thereon (the “Seller Subordinated Note”), as further discussed below; (iii) retirement by Enservco of $2.5 million in indebtedness of Adler; (iv) an earn-out payment of up to $1.0 million in cash payable to the Seller (the "Earn-Out Payment"), the actual amount of which is subject to Enservco’s satisfaction of certain EBITDA-related performance conditions during 2019; and (v) $1.0 million in cash held by Enservco and payable to the Seller on the 18 month anniversary of October 26, 2018, subject to offset by Enservco for any indemnification obligations owed by the Seller or certain former members of Adler under the Agreement (the "Indemnity Holdback Payment"). Certain aspects of the consideration have been modified since execution of the Agreement as further discussed below.

On April 4, 2019 Enservco and the Seller entered into a Settlement Agreement and Mutual Release (the “Settlement Agreement”) in order to resolve certain disputes and disagreements relating to the Transaction without litigation. Pursuant to the Settlement Agreement the parties agreed to (i) waive all rights of the Seller to the Earn-Out Payment and the Indemnity Holdback Payment, (ii) reduce the original principal balance of the Seller Subordinated Note from $4,800,000 to $4,500,000, (iii) extend the maturity date of the Seller Subordinated Note from March 31, 2019 to April 10, 2019, subject to a nine-day grace period, and (iv) execute a mutual release. All adjustments to the original purchase accounting are recognized in the second quarter of 2019, when the settlement occurred. We also considered whether the execution of the Settlement Agreement was an indicator of impairment regarding the recorded balance of goodwill and the definite-lived intangible assets. With regard to goodwill, we determined that it was not more likely than not that the carrying amount of the reporting unit was greater than its fair value, and thus determined that further evaluation of goodwill for potential impairment was not necessary. We will perform a goodwill impairment analysis over the recorded balance on an annual basis, or if we determine an indicator of impairment exists.With regards to the definite-lived intangible assets, we determined that there were no events or changes in circumstances that would indicate that its carrying amount may not be recoverable, and therefore determined that a test for recoverability was not required.

The acquisition of Adler qualified as a business combination and as such, we estimated the fair value of the assets acquired and liabilities assumed as of the closing date. Additionally, we estimated the fair value of contingent consideration given. The fair value measure of the assets acquired, and liabilities assumed applied various valuation methods to estimate the value of the intangibles that would provide a fair and reasonable value to a market participant, in view of the facts available at the time. Each valuation method was analyzed to determine which method would generate the most reasonable estimate of value of the Company’s intangible assets as of October 26, 2018. Both internal and external factors influencing the value of the intangibles were considered such as Adler’s financial position, results of operations, historical financial data, future financial expectations, economic conditions, status of the oil and gas industry and Adler’s position in the industry.

In connection with the execution of the Settlement Agreement, we reviewed our estimates and allocation of the fair value of assets acquired, consideration transferred, and contingent consideration given in connection with the Transaction. In our judgment, the reduction in the fair value of the consideration did not have a clear and direct link to the purchase price, and therefore the change in the fair value of the Indemnity Holdback Payment of approximately $908,000, the change in the fair value of the Earn-Out Payment, of approximately $44,000, and the $300,000 reduction in the amount of the Seller Subordinated Note, were each recorded as gains within Other Income (Expense) in the accompanying Statements of Operations.

The goodwill of approximately $245,000 arising from the acquisition consists largely of the synergies expected be achieved from combining the operations of Enservco and Adler. None of the goodwill is expected to be deductible for income tax purposes.

~~The following tables represent the consideration paid to the Seller and the estimated fair value of the assets acquired and liabilities assumed.~~

Consideration paid to Seller:

Cash consideration, including payment to retire Adler debt

$
6,206

Subordinated note, net of discount

4,580

Indemnity holdback at fair value

873

Earnout at fair value

44

Net purchase price

$
11,703

Recognized amounts of identifiable assets acquired and liabilities assumed:

Cash

$
43

Accounts receivable, net

1,317

Prepaid expenses and other current assets

239

Property, plant, and equipment

9,664

Intangible assets

1,045

Accounts payable and accrued liabilities

(850
)
Total identifiable net assets

11,458

Goodwill

245

Total identifiable assets acquired

$
11,703

~~Subordinated Note~~

In connection with the Transaction and pursuant to the terms of the Agreement, on October 26, 2018, Enservco issued to the Seller the Seller Subordinated Note in the original principal amount of $4.8 million in connection with the Settlement Agreement, which was reduced to $4.5 million as discussed above, and unpaid amounts thereunder beared simple interest at a rate of 8% per annum. Enservco was required to and made principal payments on November 30, 2018 of $800,000, on February 28, 2019 of $200,000, on April 9, 2019. The Seller Subordinated Note was guaranteed by Enservco’s subsidiaries and secured by a junior security interest in substantially all assets of Enservco and its subsidiaries. The Seller Subordinated Note was subject to a subordination agreement by and among Enservco, the Seller, and East West Bank. On April 19, 2019, Enservco made the final payment to settle the principal balance and accrued interest on the Seller Subordinated Note and has no further obligations to the Seller.

~~Second Amendment to Loan and Security Agreement and Consent~~

In connection with the Transaction, on October 26, 2018, Enservco and East West Bank entered into a Second Amendment to Loan and Security Agreement and Consent (the “Second Amendment to LSA”), which amended the Loan and Security Agreement dated August 10, 2017 by and between Enservco and East West Bank (the “Loan Agreement”). Pursuant to the Second Amendment to LSA, East West Bank consented to the Transaction and increased the maximum borrowing limit of the senior secured revolving credit facility provided to Enservco under the Loan Agreement to $37.0 million. Proceeds of $6.2 million from the increased senior secured revolving credit facility were used in the Transaction to make the cash payments at closing and retire the indebtedness of Adler. In connection with the Second Amendment to LSA the capital expenditure limitation contained within the Loan Agreement was increased to $3.0 million from $2.5 million.

~~On October 26, 2018, in connection with the Second Amendment to LSA, Adler entered into a Joinder Agreement, pursuant to which Adler was joined as a party to the Loan Agreement.~~

Note 54 – Intangible Assets

The components of our intangible assets as of March 31, ~~2020,~~2021, and December 31, ~~2019,~~2020, are as follows (in thousands):


	March 31, 2020			December 31, 2019			March 31, 2021			December 31, 2020
Customer relationships	$	626		$	626		$	626		$	626
Patents and trademarks		441			441			441			441
Total intangible assets		1,067			1,067			1,067			1,067
Accumulated amortization		(290	)		(239	)		(504	)		(450	)
Net carrying value	$	777		$	828		$	563		$	617

The useful lives of our intangible assets are estimated to be five years. ~~Amortization expense was approximately $51,000 for each of~~For the three months ended March 31, 2021 and 2020, amortization expense was approximately $54,000 and ~~2019.~~$51,000, respectively.

The following table represents the amortization expense for the next five years for the twelve months ending March 31 (in thousands):

	2021		2022		2023		2024		2025		2022		2023		2024		2025		2026
Customer relationships	$	125	$	125	$	125	$	76	$	-	$	125	$	125	$	73	$	-	$	-
Patents and trademarks		90		90		90		56		-		93		93		54		-		-
Total intangible asset amortization expense	$	215	$	215	$	215	$	132	$	-	$	218	$	218	$	127	$	-	$	-

The following table represents a reconciliation of the major classes of line items constituting pretax loss of discontinued operations that are disclosed as discontinued operations in the Statements of Operations:

Note 76 – Debt

East West Bank Revolving Credit Facility

On ~~August 10,~~

The 2017~~we entered into the~~ ~~2017~~ Credit Agreement ~~as amended, with East West Bank,~~ ~~which provides for a~~ ~~three~~~~-year~~ ~~$37~~ ~~million senior secured revolving credit facility (the "Credit Facility"). The~~ ~~2017~~ ~~Credit Agreement allows~~(as defined in Note 2) originally allowed us to borrow up to 85% of our eligible receivables and up to 85% of the appraised value of our eligible equipment. ~~Under~~The Fifth Amendment restructured the ~~2017~~ ~~Credit Agreement, there~~loan and provided for a loan forgiveness of $16.0 million and converts the remaining principal balance to a $17.0 million equipment term loan and a revolver to provide the Company with a maximum $1.0 million line of credit. The Sixth Amendment further extended the maturity date and modified the financial covenants effective January 1, 2021. There are no required principal payments until maturity on October 15, 2022, and ~~we have~~interest is fixed at 8.25%. Interest on the ~~option to pay variable interest rate based on (i)~~ 1~~-month LIBOR plus a margin of~~ ~~3.5%~~ ~~or (ii) interest at the Wall Street Journal prime rate plus a margin of~~ ~~1.75%.~~ ~~Interest~~first 5.25% is calculated monthly and paid in ~~arrears.~~arrears, while the remaining 3.00% is accrued to the loan balance through October 15, 2021, and due with all remaining outstanding principal on the maturity date. Additionally, the Credit Facility is subject to an unused credit line fee of 0.5% per annum multiplied by the amount by which total availability exceeds the average monthly balance of the Credit Facility, payable monthly in arrears. The Credit Facility is collateralized by substantially all of our assets and subject to financial covenants. ~~The outstanding~~

On February 11, 2021, the Company made a $3.0 million payment of principal ~~loan balance matures~~ on ~~August 10, 2020.~~ ~~Under~~ the ~~terms of the~~ ~~2017~~ ~~Credit Agreement, collateral proceeds are collected in bank-controlled lockbox accounts and credited to the Credit Facility within~~ ~~one~~ ~~business day.~~

equipment term loan. As of March 31, ~~2020,~~2021, we had an outstanding principal loan balance under the Credit Facility of approximately ~~$34.6~~$15.2 million with a weighted average interest rates of ~~5.06%~~8.25% per ~~year for $32.5 million of outstanding LIBOR Rate borrowings and 6.75% per year for the approximately $2.1 million of outstanding Prime Rate borrowings.~~year. As of March 31, ~~2020,~~2021, our ~~available cash was approximately $217,000 and we did not have any~~ availability under the amended 2017 Credit Agreement ~~as discussed below.~~ was $1.0 million. The Credit Facility balance of $15.2 million at March 31, 2021 includes $1.2 million of future interest payable due over the remaining term of the Credit Facility in accordance with ASC 470-60, Troubled Debt Restructuring by Debtors.

Under the amended 2017 Credit Agreement, we are subject to the following financial ~~covenants:~~covenants, with which we were in compliance as of March 31, 2021:

(1) ~~Maintenance~~

On December 31, 2020, we were required to maintain liquidity of a~~Fixed Charge Coverage Ratio (“FCCR”) of~~ not less than ~~1.10~~ to ~~1.00~~ ~~at the end of each month, upon which the ratio is measured on a trailing~~ ~~twelve~~~~-month basis;~~$1.5 million; and

(2) ~~In periods when~~

For each trailing three-month period, commencing with the ~~trailing~~ ~~twelve~~~~-month FCCR is less than~~ ~~1.20~~ to ~~1.00,~~three-month period ending March 31, 2021, we are required t~~o maintain minimum liquidity~~to achieve gross revenue of ~~$1,500,000~~ ~~(including excess availability under~~at least seventy percent (70%) of our projected gross revenue; and

(3) We are limited to a capital expenditures cap of $1.2 million for any fiscal year that the ~~Credit Facility and balance sheet cash).~~loan remains outstanding.

On January 6, 2020, the Company received a notice (the “Default Notice”) from East West Bank regarding the 2017 Credit Agreement. As a result of the events of default, East West Bank may accelerate the $34.0 million outstanding loan balance underIn connection with amending the 2017 Credit Agreement ~~to be immediately due and payable. As of~~on September 23, 2020, the ~~date of this report,~~Company issued to East West Bank ~~has not accelerated the outstanding loan balance amount but it may do so in the future.~~

533,334 shares of Company common stock, and a five-year warrant to purchase up to 1,000,000 additional shares of Company common stock at an exercise price of $3.75 per share. The ~~Default Notice indicates that the~~533,334 shares of Company ~~is in default under the 2017 Credit Agreement as~~common stock were valued at a ~~result~~price of ~~its:~~

~~●failure~~$2.0775 per share, or a total value of $1.1 million. The 533,334 common shares issued to ~~immediately repay a loan overadvance that occurred on October 10, 2019 that has continued through January 6, 2020;~~

~~●failure to maintain a minimum liquidity of not less than $1,500,000 for the months ended October 31, 2019 and November 30, 2019; and~~

~~●failure to maintain a minimum fixed charge coverage ratio of not less than 1:10 to 1:00 for the months ended October 31, 2019 and November 30, 2019.~~

~~The Default Notice indicated that although~~ East West Bank ~~was~~could not ~~as of January 6, 2020, exercising its rights and remedies available as a result~~be sold or transferred prior to March 23, 2021. The warrant for 1,000,000 shares is exercisable beginning September 23, 2021 until September 23, 2025. The fair value of the ~~events~~warrant was determined to be $1.4 million and were recorded in additional paid-in capital. The Company recorded a total gain on the debt restructuring of ~~default, it specifically did not waive its rights and remedies resulting~~$11.9 million during the third quarter of 2020, which was calculated by subtracting from the ~~events of default and it reserves all other available rights and remedies under~~$16.0 million loan forgiveness, a) the future interest payable on the Credit ~~Agreement, certain other related documents and applicable law.~~

~~We are also currently negotiating and working with East West Bank in an effort to obtain a waiver for our breaches~~Facility; b) the value of the ~~2017 Credit Agreement. Our ability to continue as a going concern is dependent on our renegotiation~~Company common stock issued; and c) the fair value of the 2017 Credit Agreement and our ability to further reduce costs and raise further capital, of which there can be no assurance. Further, there can be no assurance that we will successfully obtain a waiver from the East West Bank or maintain or increase our cash flows from operations. Given our current financial situation we may be required to accept terms on the transactions that we are seeking that are onerous to us.

The Default Notice received from East West Bank served as a triggering event for an event of default on our subordinated debt. As such, we have reclassified our subordinated debt to current liabilities. As of the date of this report, the lender of the subordinated debt has not waived its rights and remedies resulting from the events of default and it reserves all other available rights and remedies under the Amended and Restated Subordinated Loan Agreement with Cross Rivers, L.P., a related party, certain other related documents, and applicable law.warrant.

Debt Issuance Costs

We ~~have~~ capitalized certain debt issuance costs incurred in connection with the Credit Facility discussed above and these costs ~~are being~~were amortized to interest expense over the term of the facility on a straight-line basis. ~~The long-term portion of~~There were no remaining unamortized debt issuance costs as of ~~approximately $47,000~~ ~~and~~ ~~$82,000~~ ~~is included in Other Assets in the accompanying condensed consolidated balance sheets for~~ March 31, ~~2020,~~2021, and December 31, ~~2019,~~ 2020.~~respectively.~~ During the three months ended March 31, 2020 ~~and 2019~~, the Company amortized approximately $35,000 ~~and $34,000, respectively,~~ of these costs to Interest Expense.

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Notes Payable

Long-term debt ~~(excluding borrowings under our Credit Facility described above)~~ consists of the following (in thousands):

	March 31,				December 31,			March 31,				December 31,
	2020				2019			2021				2020

Subordinated Promissory Note with related party. Interest is at 10% and is paid quarterly. Matures June 28, 2022	$	1,000		$		1,000
Senior Revolving Credit Facility with related party. All future interest through October 15, 2021 accrued to loan pursuant to the Fifth Amendment. Interest at 8.25%, 5.25% is paid monthly while 3% is accrued and paid upon maturity. Matures October 15, 2022.								$	15,168		$		19,078

Subordinated Promissory Note with related party. Interest is at 10% and is paid quarterly. Matures June 28, 2022		1,000				1,000
Paycheck Protection Loan. Interest is at 1% with payments deferred until October 10, 2020. Matures April 10, 2022.									1,940				1,940

Subordinated Promissory Note with related party. Interest is at 10% and is paid quarterly. Matures June 28, 2022		500				500
Subordinated Promissory Note with related party. Interest is at 10% and is paid quarterly. Matures June 28, 2022. See Note 2 - Summary of Significant Accounting Policies and Recent Developments for discussion of conversion of debt balance.									-				1,250

Real Estate Loan for a facility in North Dakota, interest at 5.75%, and monthly principal and interest payment of $5,255 until October 3, 2028. Collateralized by land and property purchased with the loan.		207				218
Real Estate Loan for a facility in North Dakota, interest at 5.75%, and monthly principal and interest payment of $5,255 until October 3, 2023. Collateralized by land and property purchased with the loan.									153				167

Vehicle loans for three pickups, interest at 8.59% monthly principal and interest payments of $3,966, matures in August 2021		63				74
Vehicle loans for three pickups, interest at 8.59% monthly principal and interest payments of $3,966, matures in August 2021.									20				31

Note payable to the seller of Heat Waves. The note was garnished by the Internal Revenue Service (“IRS”) in 2009 and is due on demand; paid in annual installments of $36,000 per agreement with the IRS		53				53			14				14
Total		2,823				2,845			17,295				22,480
Less debt discount		(106	)			(119	)		-				(70	)
Less current portion		(2,542	)			(2,528	)		(1,407	)			(1,693	)
Long-term debt, net of debt discount and current portion	$	175			$	198		$	15,888			$	20,717

Aggregate maturities of debt ~~(excluding the~~ ~~2017~~ ~~Credit Agreement described in above~~), are as follows (in thousands):

Twelve Months Ending March 31,
2021	$	2,650
2022		75		824
2023		59		16,432
2024		39		39
2025		-
Thereafter		-		-
Total	$	2,823	$	17,295

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Note 8 ~~– Fair Value Measurements~~

~~The following table presents the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis by level within the fair value hierarchy (in thousands):~~

Fair Value Measurement Using

Quoted
Prices in
Active Markets (Level 1)

Significant Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Fair Value
Measurement

March 31, 2020

Derivative Instrument

Interest rate swap liability $ - $ 23 $ - $ 23

December 31, 2019

Derivative Instrument

Interest rate swap liability
$ - $ 23 $ - $ 23

The fair value of the interest rate swap is estimated using a discounted cash flow model. Such models involve using market-based observable inputs, including interest rate curves. We incorporate credit valuation adjustments to appropriately reflect both our nonperformance risk and respective counterparty’s nonperformance risk in the fair value measurements, which we have concluded are ~~not~~ ~~material to the valuation. Due to the interest rate swaps being unique and~~ ~~not~~ ~~actively traded, the fair value is classified as Level~~ 2.

~~Certain assets and liabilities are measured at fair value on a nonrecurring basis. These assets and liabilities are~~ ~~not~~ ~~measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances. As of~~ ~~March 31, 2020,~~ ~~and~~ ~~December 31, 2019,~~ the carrying value of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and interest approximates fair value due to the short-term nature of such items. The carrying value of the Company’s credit agreements are carried at cost which are approximately the fair value of the debt as the related interest rate are at the terms that approximate rates currently available to the Company.

~~The Company did~~ ~~not~~ ~~have any transfers of assets or liabilities between Level~~ 1, ~~Level~~ 2 ~~or Level~~ 3 ~~of the fair value measurement hierarchy during the~~ ~~three~~ ~~months ended March~~ ~~31, 2020~~.

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~~Note 9~~7 – Income Taxes

Income tax expense during interim periods is based on applying an estimated annual effective income tax rate to year-to-date income, plus any significant unusual or infrequently occurring items which are recorded in the interim period. The provision for income taxes for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 differs from the amount that would be provided by applying the statutory U.S. federal income tax rate of 21% to pre-tax income primarily because of state income taxes and estimated permanent differences.

The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in various jurisdictions, permanent and temporary differences, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is obtained, additional information becomes known or as the tax environment changes.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management recorded a valuation allowance to reduce its net deferred tax assets to zero.

During the three months ended March 31, 2021 and 2020, the Company's tax benefit of $0.5 million and $0.7 million, ~~and during the three months ended March 31, 2019 the Company's tax provision of $1.2 million,~~respectively, were adjusted by the valuation allowance which resulted in a net tax provision of zero.

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Note 108 – Commitments and Contingencies

Operating Leases

On January 1, 2019, we adopted ASC 842, Leases. Results for reporting periods beginning January 1, 2019 are presented in accordance with ASC 842, while prior period amounts are reported in accordance with ASC 840. On January 1, 2019, we recognized $2.4 million in right-of-use assets and $2.4 million in lease liabilities, representing the present value of minimum payment obligations associated with leased facilities and certain equipment with non-cancellable lease terms in excess of one year. We recognized approximately $845,000 in right-of-use assets and lease liabilities. We made a cumulative-effect adjustment to retained earnings of approximately $98,000 at January 1, 2019.

Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, the Company uses the weighted average interest rate on its Credit Facility. Long-term leases typically contain rent escalations over the lease term. The Company recognizes expense for these leases on a straight-line basis over the lease term.

The Company has elected the short-term lease recognition exemption for all applicable classes of underlying assets. Short-term disclosures include only those leases with a term greater than one month and 12 months or less, and expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less, that do not include an option to purchase the underlying asset that we are reasonably certain to exercise, are not recorded on the balance sheet.

The Company elected the expedient to account for lease and non-lease components as a single component for our entire population of operating lease assets.

As of March 31, ~~2020,~~2021, the Company leases facilities and certain equipment under lease commitments that expire through June 2026. Future minimum lease commitments for these operating lease commitments are as follows (in thousands):

Twelve Months Ending March 31,		Operating Leases			Financing Leases		Operating Leases			Finance Leases
2021	$	998		$	247
2022		948			232		$	948		$	99
2023		709			17			709			20
2024		644			-			645			14
2025		398			-			399			6
2026								356			-
Thereafter		446			-			90			-
		4,143			496
Total future lease commitments								3,147			139
Impact of discounting		(485	)		(84	)		(314	)		(35	)
Discounted value of lease obligations	$	3,658		$	412		$	2,833		$	104

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The following table summarizes the components of our gross operating lease costs incurred during the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,				Three Months Ended March 31,
		2020		2019	2021		2020
Operating lease expense:
Current lease cost	$	291	$	192	$	14	$	291
Long-term lease cost		20		125		257		20
Total operating lease cost	$	311	$	317	$	271	$	311
Finance lease expense:
Amortization of right-of-use assets	$	58	$	-	$	25	$	58
Interest on lease liabilities		7		-		16		7
Total lease cost	$	65	$	-	$	41	$	65

Our weighted-average lease term and discount rate used during the three months ended March 31, 2021 and 2020 are as follows:

	~~Three Months Ended March 31, 2020~~
~~Operating~~
~~Weighted-average lease term (years)~~		~~4.35~~
~~Weighted-average discount rate~~		~~6.08~~	%
~~Financing~~
~~Weighted-average lease term (years)~~		~~1.91~~
~~Weighted-average discount rate~~		~~6.10~~	%

	Three Month Ended March 31,
	2021			2020
Operating
Weighted-average lease term (years)		3.90			4.35
Weighted-average discount rate		6.08	%		6.08	%
Finance
Weighted-average lease term (years)		1.91			1.91
Weighted-average discount rate		5.92	%		6.10	%

Self-Insurance

In June 2015, the Company became self-insured under its Employee Group Medical Plan, and currently is responsible to pay the first $50,000 in medical costs per individual participant for claims incurred in the calendar year up to a maximum of approximately $1.8 million per year in the aggregate based on enrollment. The Company had an accrued liability of approximately $~~130,000~~108,000 and ~~$68,000~~$150,000 as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively, for insurance claims that it anticipates paying in the future related to claims that occurred prior to ~~March 31, 2020 and~~ December 31, ~~2019, respectively.~~2020. Effective January 1, 2021, the Company moved onto a traditional Employee Group Medical Plan and was no longer self-insured for claims occurring after that date.

Effective April 1, 2015, the Company had entered into a workers’ compensation and employer’s liability insurance policy with a term through March 31, 2018. Under the terms of the policy, the Company was required to pay premiums in addition to a portion of the cost of any claims made by our employees, up to a maximum of approximately $1.8 million over the term of the policy (an amount that was variable with changes in annualized compensation amounts). As of March 31, ~~2020,~~2021, a former employee of ours had an open claim relating to injuries sustained while in the course of employment, and the projected maximum cost of the policy as determined by the insurance carrier included estimated claim costs that have not yet been paid or incurred in connection with the claim. During the year ended December 31, 2017, our insurance carrier formally denied the workers' compensation claim and has moved to close the claim entirely. Per the terms of our insurance policy, through March 31, ~~2020,~~2021, we had paid in approximately $1.8 million of the projected maximum plan cost of $1.8 million, and had recorded approximately $1.6 million as expense over the term of the policy. ~~We recorded~~In September 2020, the ~~remaining approximately $189,000 in payments made under the policy as a long-term asset, which we expect will either be recorded as expense in future periods, or refunded to us~~claim was officially denied by the ~~insurance carrier, depending on the outcome~~Kansas Division of ~~the individual claim described above, and the final cost of any additional open claims incurred under the policy.~~Workers Compensation Judicial Unit. As of March 31, ~~2020, we believe we have paid all amounts contractually due under~~2021, no appeal has been made and the ~~policy.~~Company expects to collect the remaining $189,000 on deposit with the underwriter. Effective April 1, 2018, we entered into a new workers’ compensation policy with a fixed premium amount determined annually, and therefore are no longer partially self-insured for workers' compensation and employer's liability.

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~~Litigation~~

Enservco and Heat Waves were defendants in a civil lawsuit in federal court in Colorado, Civil Action No. 1:15-cv-00983-RBJ (“Colorado Case”), that alleged that Enservco and Heat Waves, in offering and selling frac water heating services, infringed and induced others to infringe two patents owned by Heat-On-The-Fly, LLC (“HOTF”)- ~~i.e.~~, the ‘993 Patent and the ‘875 Patent. In March of 2019, the parties moved to dismiss the Colorado Case. On March 15, 2019, the Colorado Case was dismissed in its entirety without any finding of wrongdoing by Enservco or Heat Waves.

HOTF dismissed its claims with regard to the ‘993 Patent with prejudice and its claims with regard to the ‘875 Patent without prejudice. However, HOTF agreed not to sue Enservco or Heat Waves in the future for infringement of the ‘875 Patent based on the same type of frac water heating services offered by Heat Waves prior to and through March 13, 2019. Heat Waves dismissed its counterclaims against HOTF without prejudice in order to preserve its defenses.

While the Colorado Case was pending, HOTF was issued two additional patents, which were related to the ‘993 and ‘875 Patents, but were not part of the Colorado Case. However, in March of 2015, a North Dakota federal court determined in an unrelated lawsuit (not involving Enservco or Heat Waves) that the ‘993 Patent was invalid. The same court also found that the ‘993 Patent was unenforceable due to inequitable conduct by the patent owner and/or the inventor. The Federal Circuit Court of Appeals later confirmed, among other things, the North Dakota court’s findings of inequitable conduct. In light of the foregoing, Management believes that final findings of invalidity and/or unenforceability of the ‘993 Patent based on inequitable conduct could serve as a basis to affect the validity and/or enforceability of these additional HOTF patents.

Note 119– Stockholders’ Equity

Warrants

In June 2016, the Company granted a principal of the Company’s investor relations firm warrants to acquire 2~~30,000~~,000 shares of the Company’s common stock in connection with a reduction of the firm's ongoing monthly cash service fees. The warrants had a grant-date fair value of $~~0.36~~5.40 per share and vested over a one-year period, ~~15,000~~1,000 on December 21, 2016 and ~~15,000~~1,000 on June 21, 2017. As of March 31, ~~2020~~2021, all of these warrants remain outstanding and are exercisable until June 21, 2021 at ~~$0.70~~$10.50 per share.

In ~~June 2017,~~ ~~in connection with a subordinated loan agreement~~, ~~the Company granted Cross River~~ ~~two five~~~~-year warrants to buy an aggregate total of~~ ~~1,612,902~~ ~~shares of the Company’s common stock at an exercise price of~~ ~~$0.31~~ ~~per share, the average closing price of the Company’s common stock for the~~ 20~~-day period ended~~ ~~May 11, 2017.~~ ~~The warrants had a grant-date fair value of~~ ~~$0.19~~ ~~per share and vested in full on~~ ~~June 28, 2017.~~ On June 29, 2018 Cross River exercised both warrants and acquired 1,612,902 shares of our $0.005 par value common stock. Proceeds from the exercise of the warrants in the amount of $500,000 were used to reduce the subordinated debt balance. The warrants exercised had a total intrinsic value of approximately $1.4 million at the time of exercise.

On November 11, 2019, in connection with a subordinated loan agreement, the Company granted Cross River one five-year warrant to buy an aggregate total of ~~625,000~~41,667 shares of the Company's common stock at an exercise price of ~~$0.20~~$3.00 per share. The warrants had a grant-date fair value ~~$0.16~~$2.40 and were fully vested upon issuance and remain outstanding and exercisable until November 11, 2024.

On September 23, 2020, in connection with the Fifth Amendment, the Company granted East West Bank one five-year warrant to buy an aggregate total of 1,000,000 shares of the Company's common stock at an exercise price of $3.75 per share. The warrants had a grant-date fair value of $1.42, were fully vested upon issuance and remain outstanding and are exercisable beginning one-year from the issuance date on September 23, 2021 and until September 23, 2025.

On February 11, 2021, in connection with the conversion of the subordinated loan agreement to Company common stock, the Company granted Cross River one five-year warrant to buy an aggregate total of 150,418 shares of the Company's common stock at an exercise price of $2.507 per share. The warrants had a grant-date fair value $2.02 and are exercisable beginning one-year from the issuance date on February 11, 2022 until February 11, 2026.

All warrants granted to Cross River were reviewed and approved by the independent directors of the Company.

On April 12, 2021, the SEC issued a Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies ("SPACs")(the "Staff Statement"). The SEC highlighted accounting considerations which could, in certain circumstances, indicate that warrants should be accounted for as liabilities rather than equity instruments, in which case the warrants would be subject to fair value adjustments during each reporting period. Although the Staff Statement focused on SPACs, the same accounting considerations may apply to warrants issued by non-SPAC entities. Upon issuance of the Staff Statement, the Company performed further analysis on its population of warrants, which are listed above, giving consideration to the areas of concern noted in the Staff Statement. Upon this further review of its warrant agreements, the Company determined that it has correctly accounted for its warrants as equity instruments.

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A summary of warrant activity for the three months ended March 31, ~~2020~~2021 is as follows (amounts in thousands):

Weighted

Weighted

Average

Average

Remaining

Aggregate

Exercise

Contractual

Intrinsic

Warrants

Shares

Price

Life (Years)

Value

Outstanding at December 31, 2019
655,000 $ 0.22 4.7 $ -
Issued
- - - -
Exercised
- - - -
Forfeited/Cancelled
- - - -
Outstanding at March 31, 2020
655,000 $ 0.22 4.5 -

Exercisable at March 31, 2020
655,000 $ 0.22 4.5 -

					Weighted
			Weighted		Average
			Average		Remaining
			Exercise		Contractual		��
Warrants	Shares		Price		Life (Years)

Outstanding at December 31, 2020		1,043,667	$	3.73		4.7
Issued		150,418		2.51		4.9
Outstanding at March 31, 2021		1,194,085	$	3.58		4.5

Exercisable at March 31, 2021		43,667	$	3.34		3.5

~~Stock Issued for Services~~

~~During the~~ ~~three~~ ~~months ended March~~ ~~31, 2020~~, ~~respectively, the Company did~~ ~~not~~ ~~issue any shares of common stock as compensation for services provided to the Company.~~

Note 1210 – Stock Options and Restricted Stock

Stock Options

On July 27, 2010, the Company’s Board of Directors adopted the 2010 Stock Incentive Plan (the “2010 Plan”). The aggregate number of shares of common stock that could be granted under the 2010 Plan was reset at the beginning of each year based on 15% of the number of shares of common stock then outstanding. As such, on January 1, 2016 the number of shares of common stock available under the 2010 Plan was reset to ~~5,719,069~~381,272 shares based upon ~~38,127,129~~2,541,809 shares outstanding on that date. Options were typically granted with an exercise price equal to the estimated fair value of the Company's common stock at the date of grant with a vesting schedule of one to three years and a contractual term of 5 years. As discussed below, the 2010 Plan has been replaced by a new stock option plan and no additional stock option grants will be granted under the 2010 Plan. As of March 31, ~~2020,~~2021, there were options to purchase ~~274,666~~1,079 shares outstanding under the 2010 Plan.

On July 18, 2016, the Board of Directors unanimously approved the adoption of the Enservco Corporation 2016 Stock Incentive Plan (the “2016 Plan”), which was approved by the stockholders on September 29, 2016. The aggregate number of shares of common stock that may be granted under the 2016 Plan is ~~8,000,000~~533,334 shares plus authorized and unissued shares from the 2010 Plan totaling ~~2,391,711~~159,448 for a total reserve of ~~10,391,711~~692,782 shares. As of March 31, ~~2020,~~2021, there were options to purchase ~~1,460,667~~3,823 shares and we had granted restricted stock shares of ~~1,395,833~~184,503 that remained outstanding under the 2016 ~~Plan~~ Plan.

~~We have~~ ~~not~~ ~~granted any stock options during~~During the three months ended March 31, 2021 and2020, or t~~he three~~ ~~months ended March 31,~~ ~~2019.~~

~~Table of Contents~~

~~During the three months ended March 31~~~~, 2020 and 2019,~~no options were granted or exercised.

Shares

Weighted Average
Exercise Price

Weighted Average
Remaining
Contractual Term
(Years)

Aggregate Intrinsic
Value (in thousands)

Outstanding at December 31, 2019
1,945,333 $ 0.55 1.95 $ -
Granted
- - - -
Exercised
- - - -
Forfeited or Expired
(210,000 ) 1.72 - -
Outstanding at March 31, 2020
1,735,333 $ 0.41 1.92 $ -

Vested or Expected to Vest at March 31, 2020
1,692,332 $ 0.41 1.91 -
Exercisable at March 31, 2020
1,692,332 $ 0.41 1.91 $ -

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The ~~aggregate intrinsic value in~~following is a summary of stock option activity for all equity plans for the ~~table above represents the total~~three months ended March 31, 2021:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)

Outstanding at December 31, 2020		11,569		$	5.87		0.53
Forfeited or Expired		(6,667	)		5.55		-
Outstanding at March 31, 2021		4,902		$	6.31		0.94

Vested at March 31, 2021		4,902		$	6.31		0.94
Exercisable at March 31, 2021		4,902		$	6.31		0.94

There was no aggregate intrinsic value (the difference between the estimated fair value of the Company’s common stock on March 31, ~~2020,~~2021, and the exercise price, multiplied by the number of in-the-money options) ~~that would have been received by the option holders had they exercised their~~of our outstanding options ~~on March 31~~~~, 2020.~~.

During the three months ended March 31, ~~2020~~2021 and ~~2019~~2020, the Company recognized stock-based compensation costs for stock options of approximately ~~$2,000~~$0 and $~~42,000,~~2,000, respectively, in sales, general, and administrative expenses. The Company currently expects all outstanding options to vest. Compensation cost is revised if subsequent information indicates that the actual number of options vested due to service is likely to differ from previous estimates.

~~A summary of the status of non-vested shares underlying the options are presented below:~~

Number of Shares

Weighted-Average Grant-
Date Fair Value

Non-vested at December 31, 2019
53,001 $ 0.22
Granted
- -
Vested
- -
Forfeited
(10,000 ) 0.22
Non-vested at March 31, 2020
43,001 $ 0.22

As of March 31, ~~2020,~~2021, there was ~~approximately $1,000 of total~~no remaining unrecognized compensation costs related to non-vested shares under the ~~Company’s~~Company's stock option ~~plans which will be recognized over the remaining weighted-average period of~~ ~~0.17~~ ~~years.~~plans.

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Restricted Stock

Restricted shares issued pursuant to restricted stock awards under the 2016 Stock Plan are restricted as to sale or disposition. These restrictions lapse periodically generally over a period of three years. Restrictions may also lapse for early retirement and other conditions in accordance with our established policies. Upon termination of employment, shares on which restrictions have not lapsed must be returned to us, resulting in restricted stock forfeitures. The fair market value on the date of the grant of the stock with a service condition is amortized and charged to income on a straight-line basis over the requisite service period for the entire award. The fair market value on the date of the grant of the stock with a performance condition shall be accrued and recognized when it becomes probable that the performance condition will be achieved. Restricted shares that contain a market condition are amortized and charged over the life of the award.

A summary of the restricted stock activity is presented below:

	Number of Shares			Weighted-Average Grant- Date Fair Value		Number of Shares			Weighted-Average Grant- Date Fair Value

Restricted shares at December 31, 2019		2,006,333		$	0.55
Restricted shares at December 31, 2020							24,393		$	7.32
Granted		50,000			0.19		165,000			1.05
Vested		(58,333	)		0.47		(3,667	)		7.05
Forfeited		(652,167	)		0.66		(1,223	)		9.99
Restricted shares at March 31, 2020		1,345,833		$	0.30
Restricted shares at March 31, 2021							184,503		$	1.70

During the three ended March 31, ~~2020~~2021 and ~~2019,~~2020, the Company recognized stock-based compensation costs for restricted stock of approximately $~~36,000~~24,000 and ~~$49~~$36,000 in sales, general, and administrative expenses. Compensation cost is revised if subsequent information indicates that the actual number of restricted stock vested due to service is likely to differ from previous estimates.

The following table sets forth the weighted average outstanding of potentially dilutive instruments for the three months ended March 31, ~~2020~~2021 and ~~2019:~~2020:

	Three Months Ended March 31,			Three Months Ended March 31,
		2020	2019	2021		2020
Stock options		1,772,147	2,437,443		6,235		118,143
Restricted stock					170,338		112,531
Warrants		655,000	30,000		1,123,890		43,667
Weighted average		2,427,147	2,467,443		1,300,463		274,341

On January 4, 2021, the Company awarded Company common stock to members of its Board of Directors with an award date fair value of approximately $311,000 based on the closing price of the Company's stock reported on the NYSE American on the date of the award. As of December 31, 2020, the Company accrued Board of Director fees of approximately $221,000 for services rendered from October 2019 through December 2020. During the three months ended March 31, 2021, the Company issued 118,184 shares to settle the outstanding accrual. During the three months ended March 31, 2021, the Company awarded 48,129 restricted shares for 2021 Board of Director fees and has recognized expense of approximately $23,000 related to the award of these shares.

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Note 1311- Segment Reporting

~~In 2019 we reorganized our business segments to align with how the oil and gas industry and our management team evaluates the business.~~ Enservco’s reportable business segments are Production Services and Completion and Other Services. These segments have been selected based on management’s resource allocation and performance assessment in making decisions regarding the Company.

The following is a description of the segments.

Production Services: This segment utilizes a fleet of hot oil trucks and acidizing units to provide maintenance services to the domestic oil and gas industry. These services include hot oil services and acidizing services.

Completion and Other Services: This segment utilizes a fleet of frac water heating units to provide frac water heating services to the domestic oil and gas industry. These services also include other services, which consists primarily of hauling and transport of materials for customers.

Unallocated ~~and other~~ includes general overhead expenses and assets associated with managing all reportable operating segments which have not been allocated to a specific segment.

The following tables set forth certain financial information with respect to Enservco’s reportable segments (in thousands):

										Production Services			Completion and Other Services		Unallocated		Total
Three Months Ended March 31, 2021:
Revenues										$	1,844		$	3,299	$	-	$	5,143
Cost of Revenue											1,967			3,142		-		5,109
Segment (Loss) Profit										$	(123	)	$	157	$	-	$	34

Depreciation and Amortization										$	528		$	712	$	96	$	1,336

Capital Expenditures										$	19		$	26	$	-	$	45

Identifiable assets ⁽¹⁾										$	10,842		$	14,636	$	829	$	26,307
	Production Services			Completion Services		Unallocated & Other		Total
Three Months Ended March 31, 2020:
Revenues	$	3,202		$	6,184	$	-	$	9,386	$	3,202		$	6,184	$	-	$	9,386
Cost of Revenue		3,494			4,971		-		8,465		3,494			4,971			$	8,465
Segment Profit (Loss)	$	(292	)	$	1,213	$	-	$	921
Segment (Loss) Profit										$	(292	)	$	1,213	$		$	921

Depreciation and Amortization	$	671		$	647	$	78	$	1,396	$	671		$	647	$	78	$	1,396

Capital Expenditures (Excluding Acquisitions)	$	83		$	81	$	-	$	164
Capital Expenditures										$	83		$	81	$	-	$	164

Identifiable assets ⁽¹⁾	$	17,662		$	17,033	$	1,278	$	35,973	$	17,662		$	17,033	$	1,278	$	35,973

Three Months Ended March 31, 2019:
Revenues	$	4,116		$	20,696	$	-	$	24,812
Cost of Revenue		3,346			12,020		-	$	15,366
Segment Profit (Loss)	$	770		$	8,676	$	-	$	9,446

Depreciation and Amortization	$	635		$	742	$	23	$	1,400

Capital Expenditures (Excluding Acquisitions)	$	40		$	47	$	36	$	123

Identifiable assets⁽¹⁾	$	23,092		$	26,977	$	465	$	50,534

(1)

Identifiable assets is calculated by summing the balances of accounts receivable, net; inventories; property and equipment, net; and other assets.

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The following table reconciles the segment profits reported above to the income from operations reported in the consolidated statements of operations (in thousands):

Three Months Ended March 31,

2020

2019

Segment profit

$
921

$
9,446

Sales, general, and administrative expenses

(1,762
)

(1,602
)

Patent litigation and defense costs

-

(9
)

(Loss) gain on disposals of equipment (15 ) -
Impairment - (127 )
Depreciation and amortization

(1,396
)

(1,400
)

(Loss) income from Operations

$
(2,252
)

$
6,308

	Three Months Ended March 31,
	2021			2020

Segment profit	$	34		$	921
Sales, general, and administrative expenses		(1,005	)		(1,762)
Loss on disposals of equipment		(51	)		(15	)
Depreciation and amortization		(1,336	)		(1,396	)
Loss from operations	$	(2,358	)	$	(2,252	)

Geographic Areas

The Company only does business in the United States, in what it believes are three geographically diverse regions. The following table sets forth revenue from operations for the Company’s three geographic regions ~~during the three months ended March 31, 2020 and 2019~~ (amounts in thousands):

	Three Months Ended March 31,
	2021		2020
BY GEOGRAPHY
Production Services:
Rocky Mountain Region ⁽¹⁾	$	444	$	1,193
Central USA Region ⁽²⁾		1,240		1,873
Eastern USA Region ⁽³⁾		160		136
Total Production Services		1,844		3,202

Completion and Other Services:
Rocky Mountain Region⁽¹⁾		1,952		5,006
Central USA Region⁽²⁾		-		110
Eastern USA Region⁽³⁾		1,347		1,068
Total Completion and Other Services		3,299		6,184
Total Revenues	$	5,143	$	9,386

Three Months Ended March 31,

2020

2019

BY GEOGRAPHY

Production Services:
Rocky Mountain Region ⁽¹⁾

$
1,193

$
2,063

Central USA Region ⁽²⁾

1,873

1,765

Eastern USA Region ⁽³⁾

136

288

Total Production Services 3,202 4,116

Completion Services:
Rocky Mountain Region⁽¹⁾ 5,006 14,811
Central USA Region⁽²⁾ 110 2,771
Eastern USA Region⁽³⁾ 1,068 3,114
Total Completion Services 6,184 20,696
Total Revenues

$
9,386

$
24,812

Notes to tables:

(1)

Includes the D-J Basin/Niobrara field (northeastern Colorado and southeastern Wyoming), the San Juan Basin (southeastern Colorado and northeastern New Mexico, the Powder River and Green River Basins (northeastern and southwestern Wyoming), the Bakken area (western North Dakota and eastern Montana).

(2)

Includes the Scoop/Stack Shale in Oklahoma and the Eagle Ford Shale in Texas.

(3)

Consists of the southern region of the Marcellus Shale formation (southwestern Pennsylvania and northern West Virginia) and the Utica Shale formation (eastern Ohio).

~~Note~~ 14~~- Subsequent Events~~

On April 10, 2020, the Company, entered into a promissory note (the “Note”) with East West Bank in the aggregate amount of $1,939,900, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), which was enacted March 27, 2020 and is administered by the United States Small Business Administration.

The Note matures on April 10, 2022 and bears interest at a rate of 1.00% per annum, payable in full plus all accrued interest on April 10, 2022. The Note may be prepaid by the Company at any time prior to maturity with no prepayment penalties. Funds received under the Note may only be used for the Company’s payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations incurred before February 15, 2020. The Company intends to use the entire Note proceeds for qualifying expenses. Under the terms of the PPP, amounts of the Note may be forgiven if they are used for qualifying expenses as described in the CARES Act.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion provides information regarding the results of operations for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2021 and ~~2018,~~2020, and our financial condition, liquidity and capital resources as of March 31, ~~2020,~~2021, and December 31, ~~2019.~~2020. The financial statements and the notes thereto contain detailed information that should be referred to in conjunction with this discussion.

The information discussed in this Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). All statements, other than statements of historical facts, included herein concerning, among other things, planned capital expenditures, future cash flows and borrowings, pursuit of potential acquisition opportunities, our financial position, business strategy and other plans and objectives for future operations, are forward-looking statements. These forward-looking statements are identified by their use of terms and phrases such as “may,” “expect,” “estimate,” “project,” “plan,” “believe,” “intend,” “achievable,” “anticipate,” “will,” “continue,” “potential,” “should,” “could,” and similar terms and phrases. Although we believe that the expectations reflected in these forward-looking statements are reasonable, they do involve certain assumptions, risks and uncertainties. Our results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, among others:

Finally, our future results will depend upon various other risks and uncertainties, including, but not limited to, those detailed in our filings with the SEC. For additional information regarding risks and uncertainties, please read our filings with the SEC under the Exchange Act and the Securities Act, including our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019.~~2020. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements in this paragraph and elsewhere in this Quarterly Report. Other than as required under securities laws, we do not assume a duty to update these forward-looking statements, whether as a result of new information, subsequent events or circumstances, changes in expectations or otherwise.

~~During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (“COVID-19”).~~

The COVID-19 pandemic has significantly impacted the world economic conditions including in the United States, with ~~accelerated~~significant effects beginning in February 2020, and ~~March,~~continuing through the issuance of this report, as federal, state and local governments react to the public health crisis, creating significant uncertainties inrelating to the United States economy. ~~As a result of these developments,~~Consequently, the Company has experienced and expects to further experience a material adverse impact on its revenues, results of operations and cash flows. COVID-19 related quarantines and business restrictions have had a depressing impact on United States oil demand, and hence our business, which continues through the filing date of this report. The situation iscontinues to change rapidly ~~changing~~ and additional impacts to ~~the~~our business may arise that we are not aware of currently. We cannot predict whether, when or the manner in which the conditions surrounding COVID-19 will change including the timing of lifting any restrictions or office closure requirements.

~~The Company,~~Enservco Corporation (“Enservco”) through its ~~subsidiary, Heat Waves Hot Oil Service, LLC ("Heat Waves")~~wholly owned subsidiaries (collectively referred to as the “Company”, “we” or “us”) provides ~~a range of oil field~~various services to the domestic onshore oil and natural gas ~~industry through two segments: 1) Production~~industry. These services ~~which~~ include frac water heating (Completion and other services) and hot oiling and acidizing (Production services).

We and ~~2) Completion~~our wholly owned subsidiaries provide well enhancement and fluid management services ~~which includes~~to the domestic onshore oil and natural gas industry. These services include frac water ~~heating. The Company owns~~heating and ~~operates~~hot oiling and acidizing. We own and operate a fleet of approximately ~~390~~335 specialized trucks, trailers, frac tanks and other well-site related equipment and ~~serves~~serve customers in several major domestic oil and gas areas, including the DJ Basin/Niobrara area in Colorado and Wyoming, the Bakken area in North Dakota, the San Juan Basin in northwestern New Mexico, the Marcellus and Utica Shale areas in Pennsylvania and Ohio, the Jonah area, Green River and Powder River Basins in Wyoming, the Eagle Ford Shale in ~~Texas and the Stack and Scoop plays in the Anadarko Basin in Oklahoma.~~Texas.

The Company’s corporate offices are located at 14133 County Road 9 1/2, Longmont, CO 80504. Our telephone number is (303) 333-3678. Our website is www.enservco.com.

Revenues for the three months ended March 31, ~~2020,~~2021, decreased approximately ~~$15.4~~$4.2 million, or ~~62%~~45%, from the comparable period last year due to weakness in domestic oil and gas activity levels, ~~driven by lower commodity prices, related pricing pressures, above average temperatures in Oklahoma, Pennsylvania, and eastern Ohio,~~ and the ~~more recent and~~ broader impact of ~~the OPEC+ price disputes and~~ the COVID-19 pandemic beginning in ~~March.~~March 2020. Average North American rig count declined by 50% from 785 rigs in operation during the first quarter of 2020 to 393 rigs in operation during the first quarter of 2021.

Segment profits for the three-month period ended March 31, ~~2020,~~2021, decreased by approximately ~~$8.5 million,~~$887,000, or ~~90%~~96%, due to the reasons noted above. Sales, general & administrative expense ~~excluding severance and transition costs, increased~~decreased by approximately ~~$160,000,~~$757,000, or ~~10%~~43%, ~~year over year~~year-over-year due primarily to ~~an increase~~a decrease in our bad debt expense and ~~an increase~~a decrease in outside professional services partially offset by a reduction in duplicative general office costs which costs were due, in large part, to the timing of the Adler acquisition coinciding with the start of heating season in 2019.services.

Net loss for the three months ended March 31, ~~2020,~~2021, was approximately ~~$2.8~~$2.2 million or ~~$0.05~~$0.24 per share, compared to a net ~~income~~loss of approximately ~~$4.3~~$2.8 million, or ~~$0.08~~$0.77 per share, in the same period last year due to the factors noted above.

Adjusted EBITDA for the three months ended March 31, ~~2020,~~2021, was a loss of approximately ~~$503,000~~$940,000 compared to ~~earnings~~a loss of approximately ~~$7.9 million~~$503,000 for the same period last year. See the section titled Adjusted EBITDA* within this Item for definition of Adjusted EBITDA.

During the three months ended March 31, ~~2020,~~2021, WTI crude oil price averaged approximately ~~$46~~$58 per barrel, versus an average of approximately ~~$55~~$46 per barrel in the comparable period last year. The North American rig count declined to ~~728~~417 rigs in operation as of March 31, ~~2020,~~2021, compared to ~~1,006~~728 rigs at the same time a year ago. Despite the lower ~~oil price environment~~activity levels and reduced rig count, we have grown our customer base and allocated resources to the most active basins. We are focused on increasing utilization levels and optimizing the deployment of our equipment and workforce while maintaining high standards for service quality and safe operations. We compete on the basis of the quality, breadth of our service offerings, and price.

Beginning in early March of 2020, the market experienced a precipitous decline in oil prices in response to oil demand concerns due to the economic impacts of the COVID-19 virus and anticipated increases in supply from Russia and OPEC, particularly Saudi Arabia. We expect that our customers will continue to have lower activity during this period of significantly reduced North American oil rigs in operation.

Enservco’s reportable business segments are Production Services and Completion and Other Services. These segments have been selected based on management’s resource allocation and performance assessment in making decisions regarding the Company.

Completion and Other Services: This segment utilizes a fleet of frac water heating units to provide frac water heating services and related support services to the domestic oil and gas industry. These services also include other services for other industries, which consists primarily of hauling and transport of materials and heat treating for customers.

Unallocated ~~and other~~ includes general overhead expenses and assets associated with managing all reportable operating segments which have not been allocated to a specific segment.

The following tables set forth revenue from operations and segment profits for our business segments for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2021 and ~~2018~~2020 (in thousands):

Production Services, which accounted for 36~~34%~~% of total revenue for the three months ended March 31, ~~2020,~~2021, decreased approximately ~~$914,000~~,$1.4 million, or 22%42%, to $~~3.2~~$1.8 million ~~compared~~compared to ~~$4.1~~$3.2 million for the same quarter last year due to decreased activity levels related to the lower ~~commodity prices.~~ active oil rigs.

Hot oil revenue for the three months ended March 31, ~~2020,~~2021, decreased approximately ~~$715,000,~~$1.1 million, or ~~20%~~39%, compared to the three months ended March 31, ~~2019,~~2020, from approximately ~~$3.6~~$2.9 million to approximately ~~$2.9~~$1.8 million. ~~The increase~~The decrease was primarily due to the lower domestic oil and gas activity levels driven by lower ~~commodity prices.~~active oil rigs.

Acidizing revenues for the three months ended March 31, ~~2020,~~2021, decreased by ~~approximately $199,000,~~approximately $225,000, or 42%83%, to ~~approximately $270,000~~approximately $45,000 from approximately ~~$469,000.~~$270,000. The year-over-year decline was primarily driven by the reasons noted above. The Company continues to pursue customers and partner with chemical suppliers to develop new cost-effective acid programs in seeking to expand our acidizing services across our service areas.

Segment loss for our Production services decreased ~~by $1.0 million,~~by $169,000, or ~~138%~~58%, to a loss of ~~$292,000~~$123,000 for the ~~three~~three months ended March 31, ~~2020,~~2021, compared to ~~profit~~loss of ~~$770,000~~$292,000 in the same quarter last year, which was primarily the result of cost saving measures implemented to offset the industry conditions discussed above.

Completion and Other Services, which accounted for 66%64% of total revenue for the three months ended March 31, ~~2020,~~2021, decreased approximately ~~$14.5~~$2.9 million,, or ~~70%~~47%, to $6.2$3.3 million compared to ~~$20.7~~$6.2 million for the same quarter last year due to the aforementioned related downturn in the ~~industry and above average temperatures in Oklahoma, Pennsylvania, and eastern Ohio.~~industry.

The segment profit for Completion and other services for the three months ended March 31, ~~2020,~~2021, was approximately ~~$1.2 million compared~~ $157,000 compared to segment profit of approximately ~~$8.7~~$1.2 million during the three months ended March 31, ~~2019.~~2020. Decreased segment profit related to the reasons discussed above.

The Company operates solely in three geographically diverse regions of the United States. The following table sets forth revenue from operations for the Company’s three geographic regions during the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 (in thousands):

Production Services segment revenue in the Rocky Mountain Region for the three months ended March 31, ~~2020,~~2021, decreased approximately ~~$870,000,~~$749,000, or 42%63%, primarily due toto less acidizing and hot oiling activity in the D-J and Bakken Basins.

Production Services segment revenue in the Central USA region for the three months ended March 31, ~~2020, increased~~2021, decreased by approximately ~~$108,000,~~$633,000, or 6%34%, d~~ue to an increase~~due to a decrease in hot oiling and acidizing activity in the Eagle Ford Shale.

Production Services segment revenue in the Eastern USA region for the three months ended March 31, ~~2020, decreased~~2021, increased approximately ~~$152,000,~~$24,000, or ~~53%~~18%, resulting from ~~less~~increased hot oiling in the Marcellus and Utica Basins.

Completion and Other Services segment revenue in the Rocky Mountain Region for the three months ended March 31, 2021, decreased ~~in all of our regions~~approximately $3.1 million, or 61%, primarily due to ~~combinations~~less completion activity in the D-J and Bakken Basins.

Completion and Other Services segment revenue in the Central USA Region for the three months ended March 31, 2021, decreased approximately $110,000, or 100%, primarily due to the closure of ~~less completions activity~~a location in the Anadarko Basin.

Completion and ~~above average temperatures~~Other Services segment revenue in ~~Oklahoma, Pennsylvania,~~the Eastern USA region for the three months ended March 31, 2021, increased approximately $279,000, or 26%, resulting from increased frac water heating in the Marcellus and ~~eastern Ohio.~~Utica Basins.

Because of the seasonality of our frac water heating business and, to a lesser extent, our hot oiling business, revenues generated during the cooler first and fourth quarters of our fiscal year, constitute our “heating season,” and are typically significantly higher than revenues during the second and third quarters of our fiscal year. In addition, the revenue mix of our service offerings changes outside our heating season as our Completion and other services (which includes frac water heating) typically decrease as a percentage of total revenues and our Production services increase as a percentage of total revenue. Thus, the revenues recognized in our quarterly financial statements in any given period are not indicative of the annual or quarterly revenues through the remainder of that fiscal year.

As an indication of this quarter-to-quarter seasonality, the Company generated approximately ~~76%,~~75% of its ~~2019~~2020 revenues during the first and fourth quarters compared to ~~24%,~~25% of ~~2019~~2020 revenues during the second and third quarters of 2019. In an effort to grow our year-round hot oiling revenues, in 2019 we introduced a commission program to attract and retain experienced hot oil operators, as these operators are able to retain customers in some cases regardless of which company the operator works for.quarters.

Direct operating expenses, which include labor costs, propane, fuel, chemicals, truck repairs and maintenance, supplies, insurance, and site overhead costs for our operating segments decreased by approximately ~~$6.9~~$3.4 million or ~~45%~~40% during the first quarter of ~~2020~~2021 compared to the comparable period in ~~2019,~~2020, primarily due to the severe reduction in revenue, discussed above.

During the three months ended March 31, ~~2020,~~2021, sales, general, and administrative expenses ~~increased~~decreased approximately ~~$160,000,~~$757,000, or ~~10%~~43%, to ~~$1.8~~$1.0 million compared to the same period in ~~2019~~2020 primarily due to ~~an increase~~a decrease in our bad debt ~~reserve~~expense and ~~an increase~~a decrease in professional fees related to our attempt to restructure our debt ~~partially offset by a decrease in general office expense related to cost reductions by eliminating redundant personnel and facilities primarily related to~~facility during the ~~Adler acquisition.~~

Patent litigation and defense costs decreased from $9,000 to $0 for the three months ended March 31, 2020 compared to the like period in 2019. As discussed in Part II, Item 1. – Legal Proceedings, the U.S. District Court for the Districtfirst quarter of Colorado issued a decision on March 15, 2019, dismissing the case related to three patent litigation and defense costs in its entirety without any finding of liability of Enservco or Heat Waves. We expect costs related to our defense of such claims to be minimal going forward.2020.

Depreciation and amortization expense for the three months ended March 31, ~~2020 was essentially flat~~2021 decreased by $60,000, or 4%, compared to the same period in ~~2019.~~2020 due primarily to the disposal of assets throughout 2020.

For the three months ended March 31, ~~2020,~~2021, the Company recognized a loss from operations of ~~$2.3~~ $2.4 million ~~compared~~compared to ~~income~~a loss from operations of ~~$6.3~~$2.3 million for the comparable period in ~~2019.~~ 2020. The ~~decreased~~increased loss of ~~$8.6 million~~$106,000 was primarily due toto the decrease in segment profits described above.

Interest expense decreased ~~approximately $243,000,~~approximately $608,000, or ~~27%~~95%, for the three months ended March 31, ~~2020, compared~~2021, compared to the same period in ~~2019.~~2020. The ~~increase~~decrease was primarily due to the ~~decrease~~cessation of recording interest expense after the troubled debt restructuring of our ~~average borrowings partially offset by increased interest rates on our floating rate debt.~~Credit Facility during the third quarter of 2020.

Results for the three months ended March 31, 2021 and 2020 ~~and 2019 include~~include loss from discontinued operations of approximately $8,000 and income from discontinued operations of ~~approximately~~ $36,000, ~~and losses from operations of $1.1 million,~~ respectively.

Other income for the three months ended March 31, ~~2020~~2021 was approximately ~~$20,000,~~$226,000, compared to other ~~expense~~income of approximately ~~$65,000~~$20,000 for the three months ended March 31, ~~2019,~~2020, respectively. This increase in other income was due primarily to the recognition of CARES Act payroll tax credits during the first quarter of 2021. The Company expects the recognition of these CARES Act payroll tax credits to continue during the second quarter of 2021.

As of March 31, ~~2020,~~2021, the Company had recorded a full valuation allowance on a net deferred tax asset of ~~$5.6~~$5.3 million. During the three months ended March 31, 2021 and 2020, the Company's tax benefit of $0.5 million and $0.7 million, ~~and during the three months ended March 31, 2019 the Company's tax provision of $1.2 million~~respectively, were adjusted by the valuation allowance which resulted in a net tax provision of zero.

Our effective tax rate was approximately 0% for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively. The effective tax expense for the three months ended March 31, ~~2020~~2021 and ~~2018~~2020 differs from the amount that would be provided by applying the statutory U.S. federal income tax rate of 21% to pre-tax income primarily because of state income taxes, estimated permanent differences and the recorded valuation allowance.

Management believes that, for the reasons set forth below, Adjusted EBITDA (a non-GAAP measure) is a valuable measurement of the Company's liquidity and performance and is consistent with the measurements offered by other companies in Enservco's industry.

The following table presents a reconciliation of our net income to our Adjusted EBITDA for each of the periods indicated (in thousands):

Use of Non-GAAP Financial Measures: Non-GAAP results are presented only as a supplement to the financial statements and for use within management’s discussion and analysis based on U.S. generally accepted accounting principles (GAAP). The non-GAAP financial information is provided to enhance the reader's understanding of the Company’s financial performance, but no non-GAAP measure should be considered in isolation or as a substitute for financial measures calculated in accordance with GAAP. Reconciliations of the most directly comparable GAAP measures to non-GAAP measures are provided herein.

EBITDA is defined as net (loss) income, before interest expense, income taxes, and depreciation and amortization. Adjusted EBITDA excludes stock-based compensation from EBITDA and, when appropriate, other items that management does not utilize in assessing the Company’s ongoing operating performance as set forth in the next paragraph. None of these non-GAAP financial measures are recognized terms under GAAP and do not purport to be an alternative to net income as an indicator of operating performance or any other GAAP measure.

All of the items included in the reconciliation from net income to EBITDA and from EBITDA to Adjusted EBITDA are either (i) non-cash items (e.g., depreciation, amortization of purchased intangibles, stock-based compensation, impairment losses, etc.) or (ii) items that management does not consider to be useful in assessing the Company’s ongoing operating performance (e.g., income taxes, gain or losses on sale of equipment, ~~patent litigation and defense costs,~~ severance and transition costs, other expense (income), EBITDA related to discontinued operations, etc.). In the case of the non-cash items, management believes that investors can better assess the company’s operating performance if the measures are presented without such items because, unlike cash expenses, these adjustments do not affect the Company’s ability to generate free cash flow or invest in its business.

We use, and we believe investors benefit from the presentation of, EBITDA and Adjusted EBITDA in evaluating our operating performance because it provides us and our investors with an additional tool to compare our operating performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our core operations. We believe that EBITDA is useful to investors and other external users of our financial statements in evaluating our operating performance because EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, taxes, and depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired. Additionally, our fixed charge coverage ratio covenant associated with our Loan and Security Agreement with East West Bank require the use of Adjusted EBITDA in specific calculations.

Because not all companies use identical calculations, the Company’s presentation of non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. However, these measures can still be useful in evaluating the Company’s performance against its peer companies because management believes the measures provide users with valuable insight into key components of GAAP financial disclosures.

Adjusted EBITDA for the three months ended March 31, ~~2020~~2021 decreased by approximately ~~$8.4 million~~$436,000 due primarily to the ~~decline~~decrease in ~~segment profit and increases~~outside professional services incurred during the first quarter of 2020 related to our attempt to restructure our Credit Facility, as well as the increase in ~~sales, general, and administrative costs discussed above.~~the CARES Act payroll tax credits recognized during the first quarter of 2021.

The following table summarizes our statements of cash flows for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 (in thousands):

As of March 31, ~~2020,~~ 2021, our available liquidity wa~~s $217,000,~~was $4.7 million which represented our cash balance of $3.7 million and ~~we did not have any~~$1.0 million availability on the line of credit under our 2017 Credit ~~Facility (subject to a covenant requirement that we maintain $1.5 million of available liquidity in periods where our fixed charge coverage ratio is less than 1.2:1).~~Facility. We utilize the line of credit under our 2017 Credit Facility to fund working capital requirements and investments, and during the three months ended March 31, ~~2020,~~2021, we ~~received~~repaid net cash ~~proceeds~~borrowings from our ~~various lines~~line of credit of approximately ~~$595,000.~~$701,000.

As of March 31, ~~2020,~~2021, we had a working capital ~~deficit~~ of approximately ~~$34.8~~$5.0 million, compared to ~~$33.4 million~~working capital of $306,000 as of December 31, ~~2019.~~2020. The $4.7 million increase in working capital was primarily attributable to the closing of our February 2021 Public Offering which provided net proceeds of approximately $8.8 million, partially offset by the $3.0 principal paydown of our long-term Credit Facility.

As of March 31, ~~2020,~~2021, the Company had recorded a valuation allowance to reduce its net deferred tax assets to zero.

For the three months ended March 31, ~~2020,~~2021, cash used in operating activities was approximately ~~$969,000~~$2.6 million compared to ~~$2.7 million~~$969,000 during the comparable period in ~~2019.~~2020. The increase in cash used was attributable to the ~~increase~~decrease in cash provided by the monetization of accounts receivable and an increase in the cash used for prepaid expenses and other current assets during the current year period, partially offset by the decrease in net ~~income~~loss and the increase in cash flows related to the change in accounts payable balances.

Cash ~~provided by~~used in investing activities during the three months ended March 31, ~~2020~~2021 was approximately ~~$14,000,~~$32,000, compared to ~~$585,000~~cash provided by $14,000 during the comparable period in ~~2019,~~2020, primarily due to proceeds received from the sale of equipment related to our discontinued ~~operations.~~operations during the prior year period, partially offset by the decrease in capital expenditures during the current year period.

Cash provided by financing activities for the three months ended March 31, ~~2020~~2021 was ~~$509,000~~approximately $4.9 million, compared to ~~$1.8 million~~$509,000 for the comparable period in ~~2019.~~2020. The change is due to ~~decreased borrowings in 2020 due to decreased activity levels.~~the net proceeds from our February 2021 Public Offering, partially offset by line of credit repayments and the paydown of our long-term Credit Facility during the first quarter of 2021.

Over the past three years we have invested significantly in process improvement initiatives designed to make the Company operate more efficiently and take better advantage of our expanded fleet and national leadership position in frac water heating. We face a very difficult operating environment in ~~2020~~2021 with exploration and production companies significantly cutting back their drilling and completions plans and exerting significant pressure on us to reduce our prices for the services we provide. In order to position us in a more sustainable liquidity situation, we successfully completed two equity offerings during late 2020 and early 2021 that provided us with aggregate net proceeds of $12.3 million. Additionally, ~~as indicated above,~~ we are in default under out 2017 Credit Agreement and we will need additional debt or equity capital to continue operations through 2020. We cannot assure that we will raise such capital on terms acceptable to us, if at all. Dueentered into two amendments to our ~~lack~~Credit Facility during the in late third quarter 2020 and the first quarter of ~~capital~~2021 that provided us with significant relief under our Credit Facility, including a $16.0 million principal reduction, and two extensions of the debt which now matures on October 15, 2022. Upon closing on our second equity offering, which occurred on February 11, 2021, we ~~may be forced to curtail operations in some or all of~~made a $3.0 million principal payment on our locations which will materially adversely affect our revenues and our ability to continue as a going concern. In the event we are able to continue as a going concern, our long-term goals include driving increased fleet utilization, optimizing fleet deployment, driving further operating efficiencies through technology and proactive cost management, and de-levering our balance sheet.Credit Facility. Our business is heavily dependent on exploration and production activity levels, which fluctuate based on commodity prices, capital budgets and other factors. Activity levels significantly declined ~~beginning in the fourth quarter of 2019~~throughout 2020 due to ~~year-end capital budget exhaustion, decreases~~the depression of commodity prices, the decrease in ~~drilling~~active rigs and ~~completion activity~~the impacts of the COVID-19 pandemic. The economic impacts of the pandemic and ~~substantial price decreases for crude oil and natural gas that occurred during~~ the ~~first quarter of 2020. Those declines may be partially mitigated by demand for our Production Services.~~significantly lower rig counts have continued into 2021. We continue to seek opportunities to expand our business operations through organic growth, including increasing the volume of current services offered to our new and existing ~~customers.~~customers and relocating more of our equipment to increase utilization. We will also continue to expand our customer relationships while maintaining an appropriate balance between recurring maintenance work and drilling and completion related services.

Our capital obligations as of March 31, ~~2020~~2021 consist primarily the 2017 Credit Agreement which matures ~~August 10, 2020.~~October 15, 2022. In addition, we also have scheduled principal payments under certain term loans, finance leases and operating leases. General terms and conditions for amounts due under these commitments and obligations are summarized in the notes to the financial statements. As discussed above, our lender under the 2017 Credit Agreement has declared us to be in default on our $34.6 million of indebtedness due to it and has reserved all its rights and remedies under the agreement including the right to accelerate and declare our loans due and payable and to foreclose on the collateral pledged, in whole or in part.

As of March 31, ~~2020,~~2021, we had no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.

We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information under this Item.

~~As required by Rule 13a-15 under the~~ ~~Exchange Act, as of March 31, 2020, we~~We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and ~~procedures.~~procedures, as such term is defined under Rule 13a-15(e) or 15d-15(e) promulgated under the Exchange Act, as of March 31, 2021. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal financial officer). Based ~~upon and as of the date of~~on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, ~~2020.~~2021.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

There has been no change in the Company's internal control over financial reporting, as such term is defined under Rule 13a-15(f) of the Exchange Act, during the quarter covered by this report that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

See the Company’s risk factors set forth in the Company’s annual report on Form 10-K for the year ended December 31, ~~2019,~~2020, filed on March ~~20, 2020,~~23, 2021, which is incorporated herein by reference. ~~In addition, see the additional risk factor below.~~

~~Our success depends on key members of our management, the loss of any executive or key personnel could disrupt our business operations.~~

We depend to a large extent on the services of certain of our executive officers. The loss of the services of Ian Dickinson or Marjorie Hargrave, could disrupt our operations. Although we have entered into employment agreements with Mr. Dickinson and Ms. Hargrave, that contain, among other things non-compete and confidentiality provisions, we may not be able to enforce the non-compete and/or confidentiality provisions in the employment agreements.

(1) Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on February 2, 2021.

(2) Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on February 3, 2021.

(3) Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on April 30, 2021.

~~In accordance with~~Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware		84-0811316
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)
	��
~~999 18th St., Ste. 1925N~~14133 Country Road 9 1/2 ~~Denver,~~Longmont, CO		~~80202~~80504
(Address of principal executive offices)		(Zip Code)

	Page

Part I – Financial Information

Item 1. Financial Statements

Condensed Consolidated Balance Sheets	2

Condensed Consolidated Statements of Operations	3

Condensed Consolidated Statements of Stockholders' Equity	4

Condensed Consolidated Statements of Cash Flows	5

Notes to the Condensed Consolidated Financial Statements	6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	32

Item 3. Quantitative and Qualitative Disclosures about Market Risk	45

Item 4. Controls and Procedures	45


Part II

Item 1. Legal Proceedings	46

Item 1A. Risk Factors	46

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	47

Item 3. Defaults Upon Senior Securities	47

Item 4. Mine Safety Disclosures	47

Item 5. Other Information	47

Item 6. Exhibits	48

	March 31,			December 31,			March 31,			December 31,
ASSETS	2020			2019			2021			2020
	(Unaudited)
Current Assets
Cash and cash equivalents		217			663		$	3,700		$	1,467
Accounts receivable, net		5,695			6,424			3,172			1,733
Prepaid expenses and other current assets		722			1,016			971			858
Inventories		359			398			334			295
Income tax receivable, current		57			43
Current assets of discontinued operations		-			187
Assets held for sale								527			527
Total current assets		7,050			8,731			8,704			4,880

Property and equipment, net		25,450			26,620			19,035			20,317
Goodwill		546			546			546			546
Intangible assets, net		777			828			563			617
Income taxes receivable, non-current		-			14
Right-of-use asset - financing, net		499			569
Right-of-use asset - finance, net								110			129
Right-of-use asset - operating, net		3,563			3,793			2,708			2,918
Other assets		407			445			421			423
Non-current assets of discontinued operations		1,301			1,430			347			353

TOTAL ASSETS		39,593			42,976		$	32,434		$	30,183

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities		3,600			4,470		$	1,315		$	1,931
Senior revolving credit facility		34,589			33,994
Subordinated debt		2,394			2,381
Lease liability - financing, current		205			207
Senior revolving credit facility, related party (including future interest payable of $735 and $892, respectively - see Note 6)								1,318			1,593
Lease liability - finance, current								66			65
Lease liability - operating, current		853			848			847			854
Current portion of long-term debt		148			147			89			100
Current liabilities of discontinued operations		31			72			33			31
Total current liabilities		41,820			42,119			3,668			4,574

Long-Term Liabilities
Senior revolving credit facility, related party (including future interest payable of $433 and $485, respectively - see Note 6)								13,850			17,485
Subordinated debt, related party (Note 2)								-			1,180
Long-term debt, less current portion		175			198			2,038			2,052
Lease liability - financing, less current portion		207			259
Lease liability - finance, less current portion								38			55
Lease liability - operating, less current portion		2,805			3,009			1,986			2,185
Other liability		33			33
Other liabilities								43			88
Long-term liabilities of discontinued operations		27			34			-			9
Total long-term liabilities		3,247			3,533			17,955			23,054
Total liabilities		45,067			45,652			21,623			27,628

Commitments and Contingencies (Note 10)
Commitments and Contingencies (Note 8)

Stockholders' Equity
Preferred stock, $.005 par value, 10,000,000 shares authorized, no shares issued or outstanding		-			-			-			-
Common stock. $.005 par value, 100,000,000 shares authorized, 55,612,829 and 55,642,829 shares issued, respectively; 103,600 shares of treasury stock; and 55,509,229 and 55,539,229 shares outstanding, respectively		275			278
Common stock. $.005 par value, 100,000,000 shares authorized; 11,439,630 and 6,307,868 shares issued as of March 31, 2021 and December 31, 2020, respectively; 6,907 shares of treasury stock as of March 31, 2021 and December 31, 2020, respectively; and 11,432,723 and 6,300,961 shares outstanding as of March 31, 2021 and December 31, 2020, respectively								57			32
Additional paid-in capital		22,108			22,066			40,456			30,052
Accumulated deficit		(27,857	)		(25,020	)		(29,702	)		(27,529	)
Total stockholders' equity		(5,474	)		(2,676	)		10,811			2,555

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		39,593			42,976		$	32,434		$	30,183

	March 31, 2020			December 31, 2019			March 31, 2021		December 31, 2020

Current Assets	$	7,050		$	8,731		$	8,704	$	4,880
Total Assets	$	39,593		$	42,976		$	32,434	$	30,183
Current Liabilities	$	41,820		$	42,119		$	3,668	$	4,574
Total Liabilities	$	45,067		$	45,652		$	21,623	$	27,628
Working Capital (Current Assets net of Current Liabilities)	$	(34,770	)	$	(33,388	)	$	5,036	$	306
Stockholders’ Equity	$	(5,474	)	$	(2,676	)	$	10,811	$	2,555

Exhibit No.		Title
4.1*		Warrant to purchase shares of common stock issued by the Company to Cross River Partners, L.P. on February 3, 2021
10.1		Sixth Amendment to the Loan and Security Agreement and Waiver, dated as of February 1, 2021, by and among Enservco Corporation, a Delaware corporation, Dillco Fluid Service, Inc., a Kansas corporation, Heat Waves Hot Oil Service LLC, a Colorado limited liability company, Heat Waves Water Management LLC, a Colorado limited liability company, and Adler Hot Oil Service, LLC, a Delaware limited liability company, and East West Bank (1)
10.2		Note Conversion Agreement dated February 3, 2021 by and between Enservco Corporation and Cross River Partners L.P. (2)
10.3		Seventh Amendment to the Loan and Security Agreement and Waiver, dated as of April 20, 2021, by and among Enservco Corporation, a Delaware corporation, Dillco Fluid Service, Inc., a Kansas corporation, Heat Waves Hot Oil Service LLC, a Colorado limited liability company, Heat Waves Water Management LLC, a Colorado limited liability company, and Adler Hot Oil Service, LLC, a Delaware limited liability company, and East West Bank. (3)
31.1		Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 ~~(Ian Dickinson,~~(Richard A. Murphy, Principal Executive Officer). Filed herewith.
31.2		Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Marjorie Hargrave, Principal Financial Officer). Filed herewith.
32		Certification Pursuant to 18 U.S.C. §1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 ~~(Ian Dickinson,~~(Richard A. Murphy, Chief Executive Officer, and Marjorie Hargrave, Chief Financial Officer). Filed herewith.
101.INS		XBRL Instance Document
101.SCH		XBRL Schema Document
101.CAL		XBRL Calculation Linkbase Document
101.LAB		XBRL Label Linkbase Document
101.PRE		XBRL Presentation Linkbase Document
101.DEF		XBRL Definition Linkbase Document

	For the Three Months Ended
	March 31,
	2020			2019

Revenues
Production services	$	3,202		$	4,116
Completion services		6,184			20,696
Total revenues		9,386			24,812

Expenses
Production services		3,494			3,346
Completion services		4,971			12,020
Sales, general, and administrative expenses		1,762			1,602
Patent litigation and defense costs		-			9
Loss on disposal of assets		15			-
Impairment loss		-			127
Depreciation and amortization		1,396			1,400
Total operating expenses		11,638			18,504

(Loss) Income from Operations		(2,252	)		6,308

Other (Expense) Income
Interest expense		(641	)		(884	)
Other income (expense)		20			(65	)
Total other expense		(621	)		(949	)

(Loss) Income from continuing operations before tax benefit		(2,873	)		5,359
Income tax expense		-			-
(Loss) Income from continuing operations	$	(2,873	)	$	5,359
Discontinued operations (Note 6)
Income (Loss) from operations of discontinued operations		36			(1,056	)
Income tax benefit		-			-
Income (Loss) from discontinued operations		36			(1,056	)
Net (loss) income	$	(2,837	)	$	4,303


(Loss) Earnings from continuing operations per common share - basic	$	(0.05	)	$	0.10
Loss from discontinued operations per common share - basic		-			(0.02	)
Net (loss) income per share - basic	$	(0.05	)	$	0.08


(Loss) Earnings from continuing operations per common share - diluted	$	(0.05	)	$	0.10
Loss from discontinued operations per common share - diluted		-			(0.02	)
Net (loss) earnings per share - diluted	$	(0.05	)	$	0.08

Basic weighted average number of common shares outstanding		55,518			54,266
Add: Dilutive shares		-			951
Diluted weighted average number of common shares outstanding		55,518			55,217

Consideration paid to Seller:
Cash consideration, including payment to retire Adler debt	$	6,206
Subordinated note, net of discount		4,580
Indemnity holdback at fair value		873
Earnout at fair value		44
Net purchase price	$	11,703

Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash	$	43
Accounts receivable, net		1,317
Prepaid expenses and other current assets		239
Property, plant, and equipment		9,664
Intangible assets		1,045
Accounts payable and accrued liabilities		(850	)
Total identifiable net assets		11,458
Goodwill		245
Total identifiable assets acquired	$	11,703

	March 31,		December 31,		March 31,		December 31,
	2020		2019		2021		2020
Carrying amount of major classes of assets included as part of discontinued operations:
Accounts receivable, net	$	-	$	175
Property and equipment, net		1,250		1,373		321		321
Prepaid expenses and other current assets		-		12
Other assets		51		57		26		32
Total major classes of assets of the discontinued operation	$	1,301	$	1,617	$	347	$	353

Carrying amounts of major classes of liabilities included as part of discontinued operations:
Accounts payable and accrued liabilities		6		47		6		6
Lease liabilities - financing (current and non-current)		52		59
Other liabilities						27		34
Total liabilities included as part of discontinued operations	$	58	$	106	$	33	$	40

	Three months ended
	March 31,						Three Months Ended March 31,
	2020			2019			2021			2020

Revenue	$	-		$	1,428		$	-		$	-
Cost of sales		-			(2,185	)		(1	)		-
Sales, general, and administrative expenses		-			(17	)		-			-
Depreciation and amortization		(6	)		(283	)		(6	)		(6	)
Other income and expense items that are not major		(12	)		1
Other expense items that are not major								(1	)		(12	)
Pretax loss of discontinued operations related to major classes of pretax profit		(18	)		(1,056	)		(8	)		(18	)
Gain (Loss) on disposal		54			-
Total income (loss) on discontinued operations that is presented in the Statements of Operations	$	36		$	(1,056	)
Gain on disposal								-			54
Total (loss) income on discontinued operations that is presented in the Statements of Operations							$	(8	)	$	36

	Fair Value Measurement Using
	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value Measurement
March 31, 2020
Derivative Instrument
Interest rate swap liability	$	-	$	23	$	-	$	23

December 31, 2019
Derivative Instrument
Interest rate swap liability	$	-	$	23	$	-	$	23

	Number of Shares			Weighted-Average Grant- Date Fair Value

Non-vested at December 31, 2019		53,001		$	0.22
Granted		-			-
Vested		-			-
Forfeited		(10,000	)		0.22
Non-vested at March 31, 2020		43,001		$	0.22

	For the Three Months Ended March 31,
	2020			2019

Net cash used in operating activities	$	(969	)	$	(2,646	)
Net cash provided by investing activities		14			585
Net cash used in financing activities		509			1,804
Net decrease in Cash and Cash Equivalents		(446	)		(257	)

Cash and Cash Equivalents, Beginning of Period		663			257

Cash and Cash Equivalents, End of Period	$	217		$	-

	ENSERVCO CORPORATION


Date: May 1513, 20~~, 2020~~21		/s/ ~~Ian Dickinson~~Richard A. Murphy
		~~Ian~~ ~~Dickinson, Principal~~Director and Executive ~~Officer and Chief~~ Chairman (Principal Executive ~~Officer~~Officer)


Date: May 13, 202115~~, 2020~~		/s/ Marjorie Hargrave
		~~Marjorie Hargrave, Principal Financial Officer~~President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)