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Form 10-Q EVO Transportation & For: Mar 31

June 30, 2022 2:42 PM EDT

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10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2021

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

 

Commission file number 000-54218

 

EVO Transportation & Energy Services, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

 

37-1615850

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification No.)

 

2075 West Pinnacle Peak Rd. Suite 130

Phoenix, AZ 85027

(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code: 877-973-9191

 

Securities registered pursuant to Section 12(b) of the Act: None.

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

 

 

 

 

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (Exchange Act) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of June 27, 2022, there were 16,387,944 shares of the registrant’s common stock, par value $0.0001, outstanding.

Explanatory Note


We have been delayed in filing this Quarterly Report on Form 10-Q (this “Q1 2021 Quarterly Report”). Immediately following the filing of this Q1 2021 Quarterly Report, we expect to file our Annual Report on Form 10-K for the year ended December 31, 2021 (the “2020 10-K”). Unless otherwise noted, the disclosures in this Q1 2021 Quarterly Report speak as of March 31, 2021 and for the three-month period then ended.

 

 

 


 

EVO TRANSPORTATION & ENERGY SERVICES, INC.

 

INDEX

 

 

Page No.

 

 

PART I – FINANCIAL INFORMATION

2

 

 

Item 1. Condensed Consolidated Financial Statements (unaudited)

2

 

 

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

32

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

39

 

 

Item 4. Controls and Procedures

39

 

 

PART II – OTHER INFORMATION

42

 

 

Item 1. Legal Proceedings

42

 

 

Item 1A. Risk Factors

42

 

 

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

42

 

 

Item 3. Defaults Upon Senior Securities

42

 

 

Item 4. Mine Safety Disclosures

42

 

 

Item 5. Other Information

42

 

 

Item 6. Exhibits

42

 

 

EXHIBIT INDEX

43

 

 

SIGNATURES

44

 

 

 

i


 

EVO TRANSPORTATION & ENERGY SERVICES, INC.

PART I – FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (unaudited)

Condensed Consolidated Balance Sheets (unaudited)

 

 

 

March 31,
2021

 

 

December 31,
2020

 

($ in thousands, except share and per share data)

 

 

 

 

 

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash

 

$

16,287

 

 

$

26,644

 

Accounts receivable - trade, net

 

 

18,678

 

 

 

13,033

 

Alternative fuels tax credit receivable

 

 

234

 

 

 

1,054

 

Due from related party

 

 

10

 

 

 

40

 

Prepaids and other current assets

 

 

2,763

 

 

 

2,205

 

Total current assets

 

 

37,972

 

 

 

42,976

 

Non-current assets

 

 

 

 

 

 

Property and equipment, net

 

 

26,395

 

 

 

28,240

 

Goodwill

 

 

23,837

 

 

 

23,837

 

Intangible assets, net

 

 

4,857

 

 

 

5,087

 

Operating lease right-of-use assets, net

 

 

8,212

 

 

 

10,473

 

Finance lease right-of-use assets, net

 

 

25,844

 

 

 

27,913

 

Deposits and other long-term assets

 

 

4,834

 

 

 

3,797

 

Total non-current assets

 

 

93,979

 

 

 

99,347

 

Total assets

 

$

131,951

 

 

$

142,323

 

Liabilities, Temporary Equity and Stockholders’ Deficit

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

8,902

 

 

$

11,698

 

Accrued expenses and other current liabilities

 

 

11,430

 

 

 

18,589

 

Accrued interest - related party

 

 

2,489

 

 

 

2,249

 

Embedded derivative liability

 

 

1,490

 

 

 

2,278

 

Warrant liabilities

 

 

8,157

 

 

 

11,264

 

Advances under factoring arrangements, current portion

 

 

11,875

 

 

 

24,397

 

Current portion of long-term debt

 

 

20,167

 

 

 

12,727

 

Current portion of long-term debt - related party

 

 

29,666

 

 

 

50,252

 

Operating lease liabilities, current portion

 

 

3,337

 

 

 

3,801

 

Finance lease liabilities, current portion

 

 

4,512

 

 

 

4,597

 

Total current liabilities

 

 

102,025

 

 

 

141,852

 

Non-current liabilities

 

 

 

 

 

 

Advances under factoring arrangements, less current portion

 

 

6,502

 

 

 

 

Long-term debt, less current portion

 

 

15,980

 

 

 

24,737

 

Long-term debt, less current portion - related party

 

 

4,957

 

 

 

3,379

 

Operating lease liabilities, less current portion

 

 

4,829

 

 

 

6,553

 

Finance lease liabilities, less current portion

 

 

23,138

 

 

 

24,884

 

Deferred tax liability

 

 

24

 

 

 

17

 

Total non-current liabilities

 

 

55,430

 

 

 

59,570

 

Total liabilities

 

 

157,455

 

 

 

201,422

 

Commitments and contingencies (Note 11)

 

 

 

 

 

 

Temporary Equity

 

 

 

 

 

 

Series A Redeemable Convertible Preferred stock, $0.0001 par value; 10,000,000 shares authorized,
 
100,000 shares issued and outstanding, includes accrued and undeclared dividends $107 (March 31, 2021) and $98 (December 31, 2020) liquidation preference $407 (March 31, 2021) and $398 (December 31, 2020)

 

 

407

 

 

 

398

 

Series B Redeemable Convertible Preferred stock, $0.0001 par value; 3,075,000 shares authorized,
 
2,050,000 shares issued and outstanding, includes accrued and undeclared dividends $627 (March 31, 2021) and $475 (December 31, 2020) liquidation preference $6,777 (March 31, 2021) and $6,625 (December 31, 2020)

 

 

6,777

 

 

 

6,625

 

Redeemable common stock, at redemption value; 2,240,000 (March 31, 2021 and December 31, 2020)

 

 

1,200

 

 

 

1,200

 

Stockholders’ deficit

 

 

 

 

 

 

Common stock, $0.0001 par value; 100,000,000 shares authorized; 12,972,815 (March 31, 2021 and December 31, 2020) shares issued and outstanding

 

 

2

 

 

 

2

 

Common stock subscribed and not yet issued 330 (March 31, 2021) and 80 (December 31, 2020)

 

 

 

 

 

 

Common stock issuable

 

 

4,390

 

 

 

3,474

 

Additional paid-in capital

 

 

32,116

 

 

 

30,821

 

Accumulated deficit

 

 

(70,396

)

 

 

(101,619

)

Total stockholders’ deficit

 

 

(33,888

)

 

 

(67,322

)

Total liabilities, temporary equity, and stockholders’ deficit

 

$

131,951

 

 

$

142,323

 

See notes to unaudited condensed consolidated financial statements.

2


 

EVO TRANSPORTATION & ENERGY SERVICES, INC.

Condensed Consolidated Statements of Operations (Unaudited)

 

 

 

Three Months Ended
March 31,

 

($ in thousands, except share and per share data)

 

2021

 

 

2020

 

Revenue

 

 

 

 

 

 

Trucking

 

$

53,952

 

 

$

55,406

 

Other

 

 

34,758

 

 

 

 

CNG

 

 

136

 

 

 

320

 

Total revenue

 

 

88,846

 

 

 

55,726

 

Operating expenses

 

 

 

 

 

 

Payroll, benefits and related

 

 

21,462

 

 

 

27,531

 

Purchased transportation

 

 

9,188

 

 

 

8,093

 

Fuel

 

 

5,368

 

 

 

7,141

 

Equipment rent

 

 

2,555

 

 

 

3,238

 

Maintenance and supplies

 

 

2,250

 

 

 

2,833

 

General and administrative

 

 

5,044

 

 

 

4,944

 

Operating supplies and expenses

 

 

4,088

 

 

 

3,857

 

Depreciation and amortization

 

 

3,624

 

 

 

3,470

 

Insurance and claims

 

 

2,586

 

 

 

2,560

 

CNG expenses

 

 

178

 

 

 

186

 

Total operating expenses

 

 

56,343

 

 

 

63,853

 

Operating income (loss)

 

 

32,503

 

 

 

(8,127

)

Other income (expense)

 

 

 

 

 

 

Interest expense

 

 

(4,103

)

 

 

(3,624

)

Change in fair value of embedded derivative liability

 

 

788

 

 

 

(45

)

Change in fair value of warrant liabilities

 

 

3,107

 

 

 

8,235

 

Gain (loss) on extinguishment of debt

 

 

534

 

 

 

(10,086

)

Total other income (expense)

 

 

326

 

 

 

(5,520

)

Income (loss) before income taxes

 

 

32,829

 

 

 

(13,647

)

(Provision) benefit for income taxes

 

 

(1,606

)

 

 

(55

)

Net income (loss)

 

$

31,223

 

 

$

(13,702

)

Earnings per share:

 

 

 

 

 

 

Basic

 

$

1.06

 

 

$

(0.71

)

Diluted

 

$

0.95

 

 

$

(0.71

)

Weighted average shares outstanding:

 

 

 

 

 

 

Basic

 

 

29,342,042

 

 

 

19,902,498

 

Diluted

 

 

33,214,707

 

 

 

19,902,498

 

 

See notes to unaudited condensed consolidated financial statements.

3


 

EVO TRANSPORTATION & ENERGY SERVICES, INC.

 

Condensed Consolidated Statements of Changes in Stockholders’ Deficit (Unaudited)

For the Three Months Ended March 31, 2021

 

 

 

Common Stock

 

 

Common Stock Subscribed

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated

 

 

Total
Stockholders’

 

($ in thousands, except share data)

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Issuable

 

 

Capital

 

 

Deficit

 

 

Deficit

 

Balance - December 31, 2020

 

 

15,212,815

 

 

$

2

 

 

 

80

 

 

$

 

 

$

3,474

 

 

$

30,821

 

 

$

(101,619

)

 

$

(67,322

)

Obligation to issue common stock - related party

 

 

 

 

 

 

 

 

 

 

 

 

 

 

916

 

 

 

 

 

 

 

 

 

916

 

Issuance of warrants to extinguish debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,224

 

 

 

 

 

 

1,224

 

Common stock issued for services - related party

 

 

 

 

 

 

 

 

250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

232

 

 

 

 

 

 

232

 

Series A Redeemable Preferred stock dividend

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9

)

 

 

 

 

 

(9

)

Series B Redeemable Preferred stock dividend

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(152

)

 

 

 

 

 

(152

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31,223

 

 

 

31,223

 

Balance - March 31, 2021

 

 

15,212,815

 

 

$

2

 

 

 

330

 

 

$

 

 

$

4,390

 

 

$

32,116

 

 

$

(70,396

)

 

$

(33,888

)

 

See notes to unaudited condensed consolidated financial statements.

 

4


 

EVO TRANSPORTATION & ENERGY SERVICES, INC.

 

Condensed Consolidated Statements of Changes in Stockholders’ Deficit (Unaudited)

For the Three Months Ended March 31, 2020

 

 

 

Common Stock

 

 

Common Stock Subscribed

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated

 

 

Total
Stockholders’

 

($ in thousands)

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Issuable

 

 

Capital

 

 

Deficit

 

 

Deficit

 

Balance - December 31, 2019

 

 

14,333,834

 

 

$

1

 

 

 

8,664

 

 

$

12

 

 

$

3,474

 

 

$

38,611

 

 

$

(54,771

)

 

$

(12,673

)

Reclassification of warrants from equity classified to liability classified

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,648

)

 

 

 

 

 

(7,648

)

Common stock issued for accrued interest

 

 

8,664

 

 

 

 

 

 

(8,664

)

 

 

(12

)

 

 

 

 

 

12

 

 

 

 

 

 

 

Issuance of common stock for cash - related party

 

 

1,260,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,150

 

 

 

 

 

 

3,150

 

Redemption of common stock for Series B
   redeemable preferred stock - related party

 

 

(1,260,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,150

)

 

 

 

 

 

(3,150

)

Issuance of warrants as deemed dividend - related
  party

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(455

)

 

 

 

 

 

(455

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

368

 

 

 

 

 

 

368

 

Series A Redeemable Preferred stock dividend

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(30

)

 

 

 

 

 

(30

)

Series B Redeemable Preferred stock dividend

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12

)

 

 

 

 

 

(12

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(13,702

)

 

 

(13,702

)

Balance - March 31, 2020

 

 

14,342,498

 

 

$

1

 

 

 

 

 

$

 

 

$

3,474

 

 

$

30,846

 

 

$

(68,473