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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 10-Q
____________________

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

For the Quarterly Period Ended June 30, 2021

☐ | TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to
Commission file number. 000-24575
____________________
STABILIS SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
____________________

Florida | 59-3410234
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)

11750 Katy Freeway, Suite 900, Houston, TX 77079
(Address of principal executive offices, including zip code)
(832) 456-6500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class |  | Trading Symbol |  | Name of each exchange on which registered
Common Stock, $.001 par value |  | SLNG |  | The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the 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 August 5, 2021, there were 17,497,910 outstanding shares of our common stock, par value $.001 per share.

STABILIS SOLUTIONS, INC. AND SUBSIDIARIES
FORM 10-Q Index
For the Quarterly Period Ended June 30, 2021

|  | Page
| Part I. Financial Information |
Item 1. | Financial Statements (Unaudited) |
| Condensed Consolidated Balance Sheets | 4
| Condensed Consolidated Statements of Operations | 5
| Condensed Consolidated Statements of Comprehensive Income (Loss) | 6
| Condensed Consolidated Statements of Stockholders’ Equity | 7
| Condensed Consolidated Statements of Cash Flows | 8
| Notes to Condensed Consolidated Financial Statements | 9
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 21
Item 4. | Controls and Procedures | 35
| Part II. Other Information |
Item 1. | Legal Proceedings | 36
Item 1A. | Risk Factors | 36
Item 5. | Other Information | 36
Item 6. | Exhibits | 37
Signatures | 39

2

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This document includes statements that constitute forward-looking statements within the meaning of the federal securities laws. These statements are subject to risks and uncertainties. These statements may relate to, but are not limited to, information or assumptions about us, our capital and other expenditures, dividends, financing plans, capital structure, cash flow, our recent business combination, pending legal and regulatory proceedings and claims, including environmental matters, future economic performance, operating income, cost savings, and management’s plans, strategies, goals and objectives for future operations and growth. These forward-looking statements generally are accompanied by words such as “intend,” “anticipate,” “believe,” “estimate,” “expect,” “should,” “seek,” “project,” “plan” or similar expressions. Any statement that is not a historical fact is a forward-looking statement. It should be understood that these forward-looking statements are necessarily estimates reflecting the best judgment of senior management, not guarantees of future performance. They are subject to a number of assumptions, risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described in Part II. “Item 1A. Risk Factors” in this document.
Forward-looking statements represent intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In addition to the risk factors and other cautionary statements described in Part II. “Item 1A. Risk Factors” in this document, the factors include:
•our ability to execute our business strategy;
•our limited operating history;
•our ability to satisfy our liquidity needs, including our ability to generate sufficient liquidity or cash flow from operations and our ability to obtain additional financing to affect our strategy;
•loss of one or more of our customers;
•credit and performance risk of our customers and contractual counterparties;
•cyclical or other changes in the demand for and price of LNG and natural gas;
•operational, regulatory, environmental, political, legal and economic risks pertaining to the construction and operation of our facilities;
•the effects of current and future worldwide economic conditions and demand for oil and natural gas and power system equipment and services;
•hurricanes or other natural or man-made disasters;
•public health crises, such as the ongoing COVID-19 outbreak, which could further deteriorate economic conditions;
•dependence on contractors for successful completions of our energy related infrastructure;
•reliance on third party engineers;
•competition from third parties in our business;
•failure of LNG to be a competitive source of energy in the markets in which we operate, and seek to operate;
•increased labor costs, and the unavailability of skilled workers or our failure to attract and retain qualified personnel;
•major health and safety incidents relating to our business;
•failure to obtain and maintain approvals and permits from governmental and regulatory agencies including with respect to our planned operational expansion in Mexico;
•changes to health and safety, environmental and similar laws and governmental regulations that are adverse to our operations;
•changes in regulatory, geopolitical, social, economic, tax or monetary policies and other factors resulting from the transition to the Biden administration and Democratic control of Congress;
•volatility of the market price of our common stock;
•our ability to successfully integrate acquisitions; and
•future benefits to be derived from our investments in technologies, joint ventures and acquired companies.
Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in the forward-looking statements contained herein. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. All forward-looking statements included in this document are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.
In this Quarterly Report on Form 10-Q, we may rely on and refer to information from market research reports, analyst reports and other publicly available information. Although we believe that this information is reliable, we cannot guarantee the accuracy and completeness of this information, and we have not independently verified it.
3

PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Stabilis Solutions, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands, except share and per share data)

| June 30, 2021 |  | December 31, 2020
Assets |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 3,313 |  |  | $ | 1,814 |
Accounts receivable | 7,048 |  |  | 5,620 |
Inventories, net | 159 |  |  | 226 |
Prepaid expenses and other current assets | 3,564 |  |  | 3,111 |
Due from related parties | — |  |  | 42 |
Total current assets | 14,084 |  |  | 10,813 |
Property, plant and equipment: |  |  |
Cost | 99,667 |  |  | 90,422 |
Less accumulated depreciation | (42,628) |  |  | (38,384) |
Property, plant and equipment, net | 57,039 |  |  | 52,038 |
Right-of-use assets | 602 |  |  | 786 |
Goodwill | 4,453 |  |  | 4,453 |
Investments in foreign joint ventures | 11,608 |  |  | 11,897 |
Other noncurrent assets | 328 |  |  | 326 |
Total assets | $ | 88,114 |  |  | $ | 80,313 |
Liabilities and Stockholders’ Equity |  |  |
Current liabilities: |  |  |
Current portion of long-term notes payable | $ | 127 |  |  | $ | 680 |
Current portion of long-term notes payable - related parties | 3,496 |  |  | 3,351 |
Current portion of finance lease obligation | 17 |  |  | — |
Current portion of finance lease obligation - related parties | — |  |  | 648 |
Current portion of operating lease obligations | 271 |  |  | 362 |
Short-term notes payable | — |  |  | 432 |
Accrued liabilities | 5,930 |  |  | 4,361 |
Accounts payable | 3,969 |  |  | 4,395 |
Total current liabilities | 13,810 |  |  | 14,229 |
Long-term notes payable, net of current portion | 6,797 |  |  | 682 |
Long-term notes payable, net of current portion - related parties | 1,441 |  |  | 2,726 |
Long-term portion of finance lease obligations | 71 |  |  | — |
Long-term portion of operating lease obligations | 393 |  |  | 490 |
Deferred compensation | 31 |  |  | 59 |
Deferred income taxes | 91 |  |  | 97 |
Total liabilities | 22,634 |  |  | 18,283 |
Commitments and contingencies (Note 12) |  |  |
Stockholders’ Equity: |  |  |
Common stock; $0.001 par value, 37,500,000 shares authorized, 17,497,910 and 16,896,626 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively | 18 |  |  | 17 |
Additional paid-in capital | 95,356 |  |  | 91,278 |
Accumulated other comprehensive income | 322 |  |  | 122 |
Accumulated deficit | (30,216) |  |  | (29,387) |
Total stockholders’ equity | 65,480 |  |  | 62,030 |
Total liabilities and stockholders’ equity | $ | 88,114 |  |  | $ | 80,313 |

The accompanying notes are an integral part of the condensed consolidated financial statements.
4

Stabilis Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except share and per share data)

| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Revenue |  |  |  |  |  |  |
LNG product | $ | 11,812 |  |  | $ | 2,884 |  |  | $ | 23,507 |  |  | $ | 12,015 |
Rental, service and other | 2,580 |  |  | 1,143 |  |  | 7,005 |  |  | 4,540 |
Power delivery | 1,660 |  |  | 976 |  |  | 3,204 |  |  | 2,286 |
Total revenues | 16,052 |  |  | 5,003 |  |  | 33,716 |  |  | 18,841 |
Operating expenses: |  |  |  |  |  |  |
Costs of LNG product | 9,354 |  |  | 2,551 |  |  | 18,166 |  |  | 8,648 |
Costs of rental, service and other | 1,491 |  |  | 902 |  |  | 3,732 |  |  | 2,573 |
Costs of power delivery | 1,292 |  |  | 888 |  |  | 2,452 |  |  | 2,135 |
Selling, general and administrative expenses | 3,815 |  |  | 2,368 |  |  | 7,040 |  |  | 5,554 |
Gain from disposal of fixed assets | (24) |  |  | — |  |  | (24) |  |  | (11) |
Depreciation expense | 2,218 |  |  | 2,266 |  |  | 4,443 |  |  | 4,536 |
Total operating expenses | 18,146 |  |  | 8,975 |  |  | 35,809 |  |  | 23,435 |
Loss from operations before equity income | (2,094) |  |  | (3,972) |  |  | (2,093) |  |  | (4,594) |
Net equity income from foreign joint ventures' operations: |  |  |  |  |  |  |
Income from equity investments in foreign joint ventures | 538 |  |  | 1,001 |  |  | 959 |  |  | 887 |
Foreign joint ventures' operations related expenses | (63) |  |  | (53) |  |  | (130) |  |  | (113) |
Net equity income from foreign joint ventures' operations | 475 |  |  | 948 |  |  | 829 |  |  | 774 |
Loss from operations | (1,619) |  |  | (3,024) |  |  | (1,264) |  |  | (3,820) |
Other income (expense): |  |  |  |  |  |  |
Interest expense, net | (77) |  |  | (15) |  |  | (94) |  |  | (26) |
Interest expense, net - related parties | (148) |  |  | (242) |  |  | (321) |  |  | (482) |
Other income (loss) | 1,023 |  |  | (13) |  |  | 1,113 |  |  | 25 |
Total other income (expense) | 798 |  |  | (270) |  |  | 698 |  |  | (483) |
Loss before income tax expense | (821) |  |  | (3,294) |  |  | (566) |  |  | (4,303) |
Income tax expense | 183 |  |  | 169 |  |  | 263 |  |  | 210 |
Net loss | $ | (1,004) |  |  | $ | (3,463) |  |  | $ | (829) |  |  | $ | (4,513) |
Common Stock Data: |  |  |  |  |  |  |
Net income (loss) per common share: |  |  |  |  |  |  |
Basic and diluted | $ | (0.06) |  |  | $ | (0.21) |  |  | $ | (0.05) |  |  | $ | (0.27) |
Weighted average number of common shares outstanding: |  |  |  |  |  |  |
Basic and diluted | 17,129,253 |  |  | 16,887,194 |  |  | 17,013,582 |  |  | 16,853,438 |

The accompanying notes are an integral part of the condensed consolidated financial statements.
5

Stabilis Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
(in thousands)

| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Net loss | $ | (1,004) |  |  | $ | (3,463) |  |  | $ | (829) |  |  | $ | (4,513) |
Foreign currency translation adjustment | 402 |  |  | 84 |  |  | 200 |  |  | (535) |
Total comprehensive loss | $ | (602) |  |  | $ | (3,379) |  |  | $ | (629) |  |  | $ | (5,048) |

The accompanying notes are an integral part of the condensed consolidated financial statements.
6

Stabilis Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
(in thousands, except share data)

|  |  | Common Stock |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  | Shares |  | Amount |  |  |  | Additional Paid-in Capital |  | Accumulated Other Comprehensive Income (Loss) |  | Accumulated Deficit |  |  |  | Total
Balance at December 31, 2020 |  |  |  |  | 16,896,626 |  |  | $ | 17 |  |  |  |  | $ | 91,278 |  |  | $ | 122 |  |  | $ | (29,387) |  |  |  |  | $ | 62,030 |
Stock-based compensation |  |  |  |  | — |  |  | — |  |  |  |  | 162 |  |  | — |  |  | — |  |  |  |  | 162 |
Net income |  |  |  |  | — |  |  | — |  |  |  |  | — |  |  | — |  |  | 175 |  |  |  |  | 175 |
Other comprehensive loss |  |  |  |  | — |  |  | — |  |  |  |  | — |  |  | (202) |  |  | — |  |  |  |  | (202) |
Balance at March 31, 2021 |  |  |  |  | 16,896,626 |  |  | 17 |  |  |  |  | 91,440 |  |  | (80) |  |  | (29,212) |  |  |  |  | 62,165 |
Common stock issued |  |  |  |  | 101,284 |  |  | — |  |  |  |  | — |  |  | — |  |  | — |  |  |  |  | — |
Stock-based compensation |  |  |  |  | — |  |  | — |  |  |  |  | 122 |  |  | — |  |  | — |  |  |  |  | 122 |
Shares issued in asset acquisition |  |  |  |  | 500,000 |  |  | 1 |  |  |  |  | 3,794 |  |  | — |  |  | — |  |  |  |  | 3,795 |
Net loss |  |  |  |  | — |  |  | — |  |  |  |  | — |  |  | — |  |  | (1,004) |  |  |  |  | (1,004) |
Other comprehensive income |  |  |  |  | — |  |  | — |  |  |  |  | — |  |  | 402 |  |  | — |  |  |  |  | 402 |
Balance at June 30, 2021 |  |  |  |  | 17,497,910 |  |  | $ | 18 |  |  |  |  | $ | 95,356 |  |  | $ | 322 |  |  | $ | (30,216) |  |  |  |  | $ | 65,480 |

|  |  | Common Stock |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  | Shares |  | Amount |  |  |  | Additional Paid-in Capital |  | Accumulated Other Comprehensive Income (Loss) |  | Accumulated Deficit |  |  |  | Total
Balance at December 31, 2019 |  |  |  |  | 16,800,612 |  |  | $ | 17 |  |  |  |  | $ | 90,748 |  |  | $ | (291) |  |  | $ | (22,631) |  |  |  |  | $ | 67,843 |
Common stock issued |  |  |  |  | 34,706 |  |  | — |  |  |  |  | — |  |  | — |  |  | — |  |  |  |  | — |
Stock-based compensation |  |  |  |  | — |  |  | — |  |  |  |  | 19 |  |  | — |  |  | — |  |  |  |  | 19 |
Net loss |  |  |  |  | — |  |  | — |  |  |  |  | — |  |  | — |  |  | (1,050) |  |  |  |  | (1,050) |
Other comprehensive loss |  |  |  |  | — |  |  | — |  |  |  |  | — |  |  | (619) |  |  | — |  |  |  |  | (619) |
Balance at March 31, 2020 |  |  |  |  | 16,835,318 |  |  | 17 |  |  |  |  | 90,767 |  |  | (910) |  |  | (23,681) |  |  |  |  | 66,193 |
Common stock issued |  |  |  |  | 61,308 |  |  | — |  |  |  |  | — |  |  | — |  |  | — |  |  |  |  | — |
Stock-based compensation |  |  |  |  | — |  |  | — |  |  |  |  | 139 |  |  | — |  |  | — |  |  |  |  | 139 |
Net loss |  |  |  |  | — |  |  | — |  |  |  |  | — |  |  | — |  |  | (3,463) |  |  |  |  | (3,463) |
Other comprehensive income |  |  |  |  | — |  |  | — |  |  |  |  | — |  |  | 84 |  |  | — |  |  |  |  | 84 |
Balance at June 30, 2020 |  |  |  |  | 16,896,626 |  |  | $ | 17 |  |  |  |  | $ | 90,906 |  |  | $ | (826) |  |  | $ | (27,144) |  |  |  |  | $ | 62,953 |

The accompanying notes are an integral part of the condensed consolidated financial statements.
7

Stabilis Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)

| Six Months Ended June 30,
| 2021 |  | 2020
Cash flows from operating activities: |  |  |
Net loss | $ | (829) |  |  | $ | (4,513) |
Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |
Depreciation and amortization | 4,443 |  |  | 4,536 |
Deferred income tax expense (benefit) | (6) |  |  | 28 |
Stock-based compensation expense | 284 |  |  | 158 |
Bad debt expense | — |  |  | 144 |
Gain on disposal of fixed assets | (24) |  |  | (11) |
Gain on extinguishment of debt | (1,086) |  |  | — |
Income from equity investment in joint venture | (959) |  |  | (887) |
Distributions from equity investment in joint venture | 1,387 |  |  | 2,054 |
Deferred compensation costs | (28) |  |  | 87 |
Amortization of debt issuance costs | 10 |  |  | — |
Change in operating assets and liabilities, net of acquisitions: |  |  |
Accounts receivable | (1,428) |  |  | 4,316 |
Due to (from) related parties | 42 |  |  | — |
Inventories | 92 |  |  | 28 |
Prepaid expenses and other current assets | (453) |  |  | 920 |
Accounts payable and accrued liabilities | 1,150 |  |  | (2,537) |
Other | 16 |  |  | — |
Net cash provided by operating activities | 2,611 |  |  | 4,323 |
Cash flows from investing activities: |  |  |
Acquisition of fixed assets | (5,917) |  |  | (281) |
Proceeds on sales of fixed assets | 258 |  |  | 12 |
Net cash used in investing activities | (5,659) |  |  | (269) |
Cash flows from financing activities: |  |  |
Proceeds on long-term borrowings | 7,087 |  |  | 1,080 |
Payments on long-term borrowings and financed leases from related parties | (1,701) |  |  | (1,694) |
Payments on short-term notes payable | (448) |  |  | (201) |
Payment of debt issuance costs | (420) |  |  | — |
Net cash provided by (used in) financing activities | 4,518 |  |  | (815) |
Effect of exchange rate changes on cash | 29 |  |  | (162) |
Net increase in cash and cash equivalents | 1,499 |  |  | 3,077 |
Cash and cash equivalents, beginning of period | 1,814 |  |  | 3,979 |
Cash and cash equivalents, end of period | $ | 3,313 |  |  | $ | 7,056 |
Supplemental disclosure of cash flow information: |  |  |
Interest paid | $ | 380 |  |  | $ | 474 |
Income taxes paid | 169 |  |  | 210 |
Non-cash investing and financing activities: |  |  |
Common stock issued to acquire fixed assets | $ | 3,795 |  |  | $ | — |
Equipment acquired under capital leases | 104 |  |  | — |

The accompanying notes are an integral part of the condensed consolidated financial statements
8

STABILIS SOLUTIONS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. Overview and Basis of Presentation
Overview
Stabilis Solutions, Inc. and its subsidiaries (the “Company”, “Stabilis”, “our”, “us” or “we”) produce, provide turnkey clean energy production, storage, transportation and fueling solutions using liquefied natural gas (“LNG”) and hydrogen to multiple end markets across North America. The Company also distributes LNG and hydrogen from third parties and provides services, transportation, and equipment to customers.
The Company is a supplier of LNG and hydrogen solutions to customers in diverse end markets, including aerospace, agriculture, industrial, utility, pipeline, mining, energy, remote clean power, and high horsepower transportation markets in North America and provides turnkey fuel solutions to help industrial users of propane, diesel and other crude-based fuel products convert to LNG, which may result in reduced fuel costs and improved environmental footprint. Stabilis is vertically integrated from LNG production through distribution including cryogenic equipment rental and field services. Stabilis opened its 100,000 gallons per day (“gpd”) LNG production facility in George West, Texas in January 2015 to service industrial and oilfield customers in Texas and the greater Gulf Coast region. The Company owns a second liquefaction plant capable of producing 25,000 gpd that is currently not in operation.
On June 1, 2021 the Company closed on the purchase of a third LNG production facility in Port Allen, Louisiana. The plant is capable of producing 30,000 gpd.
The Company also provides power delivery equipment and services through its subsidiary in Brazil, M&I Electric Brazil Sistemas e Servicios em Energia LTDA (“M&I Brazil”) and its 40% interest in a joint venture in China, BOMAY Electric Industries Co., Ltd. (“BOMAY”).
Basis of Presentation
The accompanying interim unaudited condensed consolidated financial statements include our accounts and those of our subsidiaries and, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and disclosures normally included in the notes to condensed consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted. We believe that the presentation and disclosures herein are adequate to make the information not misleading. The unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) for a fair presentation of the interim periods. The results of operations for the interim period are not necessarily indicative of the results of operations to be expected for the full year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2020 included in the Company's Annual Report on Form 10-K, as filed on March 16, 2021.
All intercompany accounts and transactions have been eliminated in consolidation. In the Notes to Condensed Consolidated Financial Statements (Unaudited), all dollar amounts in tabulations are in thousands, unless otherwise indicated.
The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company is required to make certain disclosures if it concludes that there is substantial doubt about the entity’s ability to continue as a going concern within one year from the date of the issuance of these financial statements. The Company has incurred recurring operating losses. The Company is subject to business risks and uncertainties inherent in the current LNG industry. There is no assurance that the Company will be able to generate sufficient revenues in the future to sustain itself or to support future growth.
These factors were reviewed by management to determine if there was substantial doubt as to the Company’s ability to continue as a going concern. Management concluded that its plan to address the Company’s liquidity issues would allow it to continue as a going concern. The Company has recently experienced its highest ever revenue year to date, including a resumption of activity with existing customers as well as new revenue opportunities, particularly in Mexico and with power generation customers. On April 8, 2021, the Company obtained a new advancing loan facility, pursuant to the United States Department of Agriculture, Business & Industry Loan Program, in the aggregate principal amount of up to $10.0 million, of which $7.0 million
9

was drawn and outstanding as of June 30, 2021. Accordingly, management believes the business will generate sufficient cash flows from its operations to fund the business for the next 12 months.
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates include the carrying amount of contingencies, valuation allowances for receivables, inventories, and deferred income tax assets, valuations assigned to assets and liabilities in business combinations, and impairments of long-lived assets. Actual results could differ from those estimates, and these differences could be material to the condensed consolidated financial statements.
2. Recent Accounting Pronouncements
Recently Adopted Accounting Standards
In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2019-12, “Simplifying the Accounting for Income Taxes” (“ASU No. 2019-12”), which simplifies the accounting for income taxes by removing certain exceptions to the general principles of Topic 740, Income Taxes and also improves consistent application by clarifying and amending existing guidance. ASU No. 2019-12 was adopted by the Company effective January 1, 2021. The adoption of this standard had no impact on our unaudited condensed consolidated financial position or results of operations.
Recently Issued Accounting Standards
In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU No. 2020-04”), which provides guidance to alleviate the burden in accounting for reference rate reform by allowing certain expedients and exceptions in applying generally accepted accounting principles to contract modifications, hedging relationships, and other transactions impacted by reference rate reform. The provisions of ASU No. 2020-04 apply only to those transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. Adoption of the provisions of ASU No. 2020-04 are optional and are effective from March 12, 2020 through December 31, 2022. We are currently evaluating the impact of ASU No. 2020-04 on our unaudited condensed consolidated financial statements.
3. Revenue Recognition
Disaggregated Revenues
The table below presents revenue disaggregated by source, for the three and six months ended June 30, 2021 and 2020 (in thousands):

| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
LNG Product | $ | 11,812 |  |  | $ | 2,884 |  |  | $ | 23,507 |  |  | $ | 12,015 |
Rental | 1,940 |  |  | 385 |  |  | 5,327 |  |  | 3,275 |
Service | 381 |  |  | 313 |  |  | 623 |  |  | 406 |
Power Delivery | 1,660 |  |  | 976 |  |  | 3,204 |  |  | 2,286 |
Other | 259 |  |  | 445 |  |  | 1,055 |  |  | 859 |
| $ | 16,052 |  |  | $ | 5,003 |  |  | $ | 33,716 |  |  | $ | 18,841 |

10

The table below presents revenue disaggregated by geographic location, for the three and six months ended June 30, 2021 and 2020 (in thousands):

|  |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  |  |  |  |
|  |  |  |  | 2021 |  | 2020 |  | 2021 |  | 2020 |  |  |  |  |
Revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Brazil |  |  |  |  | $ | 1,660 |  |  | $ | 976 |  |  | $ | 3,204 |  |  | $ | 2,286 |  |  |  |  |  |
Mexico |  |  |  |  | 2,081 |  |  | 16 |  |  | 3,697 |  |  | 49 |  |  |  |  |  |
United States |  |  |  |  | 12,311 |  |  | 4,011 |  |  | 26,815 |  |  | 16,506 |  |  |  |  |  |
|  |  |  |  | $ | 16,052 |  |  | $ | 5,003 |  |  | $ | 33,716 |  |  | $ | 18,841 |  |  |  |  |  |

See Note 4—Business Segments, below, for additional disaggregation of revenue.
Contract Liabilities
The Company recognizes contract liabilities upon receipt of payments for which the performance obligations have not been fulfilled at the reporting date, resulting in deferred revenue. Contract liabilities are included in accrued liabilities in the accompanying unaudited condensed consolidated balance sheets. The following table presents the changes in the Company’s contract liabilities for the periods ended June 30, 2021 and December 31, 2020 (in thousands):

|  |  |  |  | June 30, 2021 |  | December 31, 2020
Balance at beginning of period |  |  |  |  | $ | 357 |  |  | $ | 185 |
Cash received, excluding amounts recognized as revenue |  |  |  |  | 228 |  |  | 777 |
Amounts recognized as revenue |  |  |  |  | (347) |  |  | (605) |
Balance at end of period |  |  |  |  | $ | 238 |  |  | $ | 357 |

The Company has no other material contract assets or liabilities and contract costs.
4. Business Segments
The Company’s revenues are derived from two operating segments: LNG and Power Delivery. The LNG segment supplies LNG to multiple end markets in North America and provides turnkey fuel solutions to help users of propane, diesel and other crude-based fuel products convert to LNG. The Power Delivery segment provides power delivery equipment and services through our subsidiary in Brazil and in China through our 40% interest in BOMAY.

| Three Months Ended June 30, 2021 |  | Six Months Ended June 30, 2021
| (in thousands) |  | (in thousands)
| LNG |  | Power Delivery |  | Total |  | LNG |  | Power Delivery |  | Total
Revenues | $ | 14,392 |  |  | $ | 1,660 |  |  | $ | 16,052 |  |  | $ | 30,512 |  |  | $ | 3,204 |  |  | $ | 33,716 |
Depreciation | 2,181 |  |  | 37 |  |  | 2,218 |  |  | 4,369 |  |  | 74 |  |  | 4,443 |
Loss from operations before equity income | (1,840) |  |  | (254) |  |  | (2,094) |  |  | (1,572) |  |  | (521) |  |  | (2,093) |
Net equity income from foreign joint ventures' operations | — |  |  | 475 |  |  | 475 |  |  | — |  |  | 829 |  |  | 829 |
Income (loss) from operations | (1,840) |  |  | 221 |  |  | (1,619) |  |  | (1,572) |  |  | 308 |  |  | (1,264) |
Interest expense, net | 63 |  |  | 14 |  |  | 77 |  |  | 70 |  |  | 24 |  |  | 94 |
Interest expense, net - related parties | 148 |  |  | — |  |  | 148 |  |  | 321 |  |  | — |  |  | 321 |
Income tax expense (benefit) | 219 |  |  | (36) |  |  | 183 |  |  | 263 |  |  | — |  |  | 263 |
Net income (loss) | (1,247) |  |  | 243 |  |  | (1,004) |  |  | (1,232) |  |  | 403 |  |  | (829) |

11

| June 30, 2021
|  |  | (in thousands) |  |
| LNG |  | Power Delivery |  | Total
Total assets | $ | 72,413 |  |  | $ | 15,701 |  |  | $ | 88,114 |

| Three Months Ended June 30, 2020 |  | Six Months Ended June 30, 2020
| (in thousands) |  | (in thousands)
| LNG |  | Power Delivery |  | Total |  | LNG |  | Power Delivery |  | Total
Revenues | $ | 4,027 |  |  | $ | 976 |  |  | $ | 5,003 |  |  | $ | 16,555 |  |  | $ | 2,286 |  |  | $ | 18,841 |
Depreciation | 2,234 |  |  | 32 |  |  | 2,266 |  |  | 4,469 |  |  | 67 |  |  | 4,536 |
Loss from operations before equity income | (3,531) |  |  | (441) |  |  | (3,972) |  |  | (3,719) |  |  | (875) |  |  | (4,594) |
Net equity income from foreign joint ventures' operations | — |  |  | 948 |  |  | 948 |  |  | — |  |  | 774 |  |  | 774 |
Income (loss) from operations | (3,531) |  |  | 507 |  |  | (3,024) |  |  | (3,719) |  |  | (101) |  |  | (3,820) |
Interest expense, net | 1 |  |  | 14 |  |  | 15 |  |  | 5 |  |  | 21 |  |  | 26 |
Interest expense, net - related parties | 242 |  |  | — |  |  | 242 |  |  | 482 |  |  | — |  |  | 482 |
Income tax expense | (35) |  |  | 204 |  |  | 169 |  |  | — |  |  | 210 |  |  | 210 |
Net income (loss) | (3,740) |  |  | 277 |  |  | (3,463) |  |  | (4,220) |  |  | (293) |  |  | (4,513) |

| December 31, 2020
|  |  | (in thousands) |  |
| LNG |  | Power Delivery |  | Total
Total assets | $ | 64,757 |  |  | $ | 15,556 |  |  | $ | 80,313 |

Our operating segments offer different products and services and are managed separately as business units. Cash, cash equivalents and investments are not managed centrally, so the gains and losses on foreign currency remeasurement, and interest and dividend income, are included in the segments’ results.
5. Prepaid Expenses and Other Current Assets
The Company’s prepaid expenses and other current assets consisted of the following (in thousands):

| June 30, 2021 |  | December 31, 2020
Prepaid LNG | $ | 86 |  |  | $ | 90 |
Prepaid insurance | 403 |  |  | 734 |
Prepaid supplier expenses | 276 |  |  | 299 |
Other receivables | 2,242 |  |  | 1,521 |
Deposits | 335 |  |  | 285 |
Other | 222 |  |  | 182 |
Total prepaid expenses and other current assets | $ | 3,564 |  |  | $ | 3,111 |

12

6. Property, Plant and Equipment
The Company’s property, plant and equipment consisted of the following (in thousands):

|  |  | June 30, 2021 |  | December 31, 2020
Liquefaction plants and systems |  |  | $ | 47,118 |  |  | $ | 40,841 |
Real property and buildings |  |  | 2,392 |  |  | 1,649 |
Vehicles and tanker trailers and equipment |  |  | 49,358 |  |  | 47,179 |
Computer and office equipment |  |  | 577 |  |  | 532 |
Construction in progress |  |  | 191 |  |  | 191 |
Leasehold improvements |  |  | 31 |  |  | 30 |
|  |  | 99,667 |  |  | 90,422 |
Less: accumulated depreciation |  |  | (42,628) |  |  | (38,384) |
|  |  | $ | 57,039 |  |  | $ | 52,038 |

Depreciation expense for the six months ended June 30, 2021 and 2020 totaled $4.4 million and $4.5 million, respectively, of which all is included in the unaudited condensed consolidated statements of operations as its own and separate line item.
On June 1, 2021 the Company closed on the purchase of an LNG production facility in Port Allen, Louisiana. The acquisition included the LNG liquefaction facility, the related assets and real property. The Company paid consideration of $5.0 million in cash and 500,000 shares of Company common stock, subject to a registration rights agreement and valued at $3.8 million.
7. Investments in Foreign Joint Ventures
BOMAY. The Company holds a 40% interest in BOMAY Electric Industries Company, Ltd. (“BOMAY”), which builds electrical systems for sale in China. The majority partner in this foreign joint venture is Baoji Oilfield Machinery Co., Ltd. (a subsidiary of China National Petroleum Corporation), which owns 51%. The remaining 9% is owned by AA Energies, Inc.
The Company made no sales to its joint venture in the three and six months ended June 30, 2021 and 2020.
Below is summary financial information for BOMAY at June 30, 2021 and December 31, 2020, and operational results for the three and six months ended June 30, 2021 and 2020 in U.S. dollars (in thousands, unaudited):

| June 30, 2021 |  | December 31, 2020
Assets: |  |  |
Total current assets | $ | 52,416 |  |  | $ | 51,811 |
Total non-current assets | 6,740 |  |  | 7,136 |
Total assets | $ | 59,156 |  |  | $ | 58,947 |
Liabilities and equity: |  |  |
Total liabilities | $ | 27,291 |  |  | $ | 26,355 |
Total joint ventures’ equity | 31,865 |  |  | 32,592 |
Total liabilities and equity | $ | 59,156 |  |  | $ | 58,947 |

| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Revenue | $ | 19,005 |  |  | $ | 18,647 |  |  | $ | 33,221 |  |  | $ | 27,203 |
Gross Profit | 2,458 |  |  | 3,336 |  |  | 4,691 |  |  | 4,232 |
Earnings | 1,265 |  |  | 2,283 |  |  | 2,235 |  |  | 1,999 |

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The following is a summary of activity in our investment in BOMAY for the periods ended June 30, 2021 and December 31, 2020 in U.S. dollars (in thousands, unaudited):

| June 30, 2021 |  | December 31, 2020
Investments in BOMAY (1)(2) |  |  |
Initial investment | $ | 9,333 |  |  | $ | 9,333 |
Undistributed earnings: |  |  |
Balance at the beginning of the period | 1,908 |  |  | 1,257 |
Equity in earnings | 959 |  |  | 2,705 |
Dividend distributions | (1,387) |  |  | (2,054) |
Balance at end of period | 1,480 |  |  | 1,908 |
Foreign currency translation: |  |  |
Balance at the beginning of the period | 656 |  |  | (69) |
Change during the period | 139 |  |  | 725 |
Balance at end of period | 795 |  |  | 656 |
Total investment in BOMAY at end of period | $ | 11,608 |  |  | $ | 11,897 |

(1)Accumulated statutory reserves in equity method investments of $2.66 million at June 30, 2021 and December 31, 2020 is included in our investment in BOMAY. In accordance with the People’s Republic of China, (“PRC”) regulations on enterprises with foreign ownership, an enterprise established in the PRC with foreign ownership is required to provide for certain statutory reserves, namely (i) General Reserve Fund, (ii) Enterprise Expansion Fund and (iii) Staff Welfare and Bonus Fund, which are appropriated from net profit as reported in the enterprise’s PRC statutory accounts. A non-wholly-owned foreign invested enterprise is permitted to provide for the above allocation at the discretion of its board of directors. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends.
(2)The Company’s initial investment in BOMAY differed from the Company’s 40% share of BOMAY’s equity as a result of applying fair value accounting pursuant to ASC 805. The basis difference of approximately $1.2 million will be accreted over the remaining seven year life of the joint venture. The Company accreted $65 thousand and $86 thousand during the six months ended June 30, 2021 and 2020, respectively, which is included in income from equity investments in foreign joint ventures in the accompanying condensed consolidated statement of operations. As of June 30, 2021 and December 31, 2020, accumulated accretion totaled $248 thousand and $183 thousand, respectively.
The Company accounts for its investment in BOMAY using the equity method of accounting. Under the equity method, the Company’s share of the joint venture operations earnings or losses is recognized in the condensed consolidated statements of operations as equity income (loss) from foreign joint venture operations. Joint venture income increases the carrying value of the joint venture and joint venture losses reduce the carrying value. Dividends received from the joint venture reduce the carrying value. The Company considers dividend distributions received from its equity method investments which do not exceed cumulative equity in earnings subsequent to the date of investment to be a return on investment and classifies these distributions as operating activities in the accompanying condensed consolidated statements of cash flows. In accordance with our long-lived asset policy, when events or circumstances indicate the carrying amount of an asset may not be recoverable, management tests long-lived assets for impairment. If the estimated future cash flows are projected to be less than the carrying amount, an impairment write-down (representing the carrying amount of the long-lived asset which exceeds the present value of estimated expected future cash flows) would be recorded as a period expense. In making this evaluation, a variety of quantitative and qualitative factors are considered including national and local economic, political and market conditions, industry trends and prospects, liquidity and capital resources and other pertinent factors. Based on this evaluation for this reporting period, the Company does not believe an impairment adjustment is necessary at June 30, 2021.
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8. Accrued Liabilities
The Company’s accrued liabilities consisted of the following (in thousands):

| June 30, 2021 |  | December 31, 2020
Compensation and benefits | $ | 2,547 |  |  | $ | 1,745 |
Professional fees | 360 |  |  | 408 |
LNG fuel and transportation | 1,922 |  |  | 1,151 |
Accrued interest | 35 |  |  | 21 |
Contract liabilities | 238 |  |  | 357 |
Other taxes payable | 435 |  |  | 328 |
Other accrued liabilities | 393 |  |  | 351 |
Total accrued liabilities | $ | 5,930 |  |  | $ | 4,361 |

9. Debt
The Company’s carrying value of debt consisted of the following (in thousands):

| June 30, 2021 |  | December 31, 2020
Unsecured promissory note | $ | — |  |  | $ | 1,080 |
Secured term note | 6,590 |  |  | — |
Secured term note payable - related party | 1,077 |  |  | 1,077 |
Secured promissory note - related party | 3,859 |  |  | 5,000 |
Insurance and other notes payable | 335 |  |  | 714 |
Less: amounts due within one year | (3,623) |  |  | (4,463) |
Total long-term debt | $ | 8,238 |  |  | $ | 3,408 |

Unsecured Promissory Note
During 2020, the Company received loan proceeds of $1.1 million (the “PPP Loan”) pursuant to the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). Under the terms of the PPP, all or a portion of the principal may be forgiven if the PPP Loan proceeds are used for qualifying expenses as described in the CARES Act, such as payroll costs, benefits, rent, and utilities. In June 2021, the forgiveness of the PPP Loan was approved by the Small Business Administration in full and the PPP Loan has been settled. The Company recognized a gain on forgiveness of debt in the amount of $1.1 million which is included in other income (expense) in the accompanying condensed consolidated statements of operations.
Secured Term Note
On April 8, 2021, the Company entered into a Loan Agreement (the “Loan Agreement”) with AmeriState Bank (“Lender”), as lender, pursuant to the United States Department of Agriculture, Business & Industry Loan Program, to provide for an advancing loan facility in the aggregate principal amount of up to $10.0 million (the “USDA Loan”), of which $7.0 million was drawn and outstanding as of June 30, 2021. The USDA Loan, which is in the form of a term loan facility, matures on April 8, 2031 and bears interest at 5.75% per annum through April 8, 2026, and the U.S. prime lending rate plus 2.5% per annum thereafter. The USDA Loan provides that proceeds from borrowings may be used for working capital purposes at the Company’s liquefaction plant in George West, Texas and related fees and costs associated with the USDA Loan.
Upon an Event of Default (as defined in the Loan Agreement), the Lender may (i) terminate its commitment, (ii) declare the outstanding principal amount of the Advancing Notes (as defined in the Loan Agreement) due and payable, or (iii) exercise all rights and remedies available to Lender under the Loan Agreement.
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On April 8, 2021, Mile High LNG LLC, Stabilis GDS, Inc., Stabilis LNG Eagle Ford LLC and Stabilis Energy Services, LLC, each a wholly owned subsidiary of the Company (collectively, “Debtor”), entered into a Security Agreement and Assignment (the “Security Agreement”) in favor of the Lender. The Security Agreement grants to Lender a first priority security interest in the collateral identified therein, which includes specific equipment collateral owned by the Company.
During the six months ended June 30, 2021 and 2020, the Company recorded interest expense on debt as follows (in thousands):

| June 30, 2021 |  | June 30, 2020
Unsecured promissory note | $ | — |  |  | $ | — |
Secured term note | 59 |  |  | 0
Secured term note payable - related party | 20 |  |  | 42 |
Secured promissory note - related party | 291 |  |  | 435 |
Insurance and other notes payable | 30 |  |  | 27 |
Total interest expense on debt | $ | 400 |  |  | $ | 504 |

Certain of the agreements governing our outstanding debt have certain covenants with which we must comply. As of June 30, 2021, we were in compliance with all of these covenants.
10. Leases
The following table summarizes the supplemental balance sheet information related to lease assets and lease liabilities as of June 30, 2021 and December 31, 2020 (in thousands):

| Classification |  | June 30, 2021 |  | December 31, 2020
Assets |  |  |  |  |
Operating lease assets | Right-of-use assets |  | $ | 602 |  | $ | 786
Finance lease assets | Property and equipment, net of accumulated depreciation |  | 95 |  | 6,781
Total lease assets |  |  | $ | 697 |  | $ | 7,567
Liabilities |  |  |  |  |
Current |  |  |  |  |
Operating | Current portion of operating lease obligations |  | $ | 271 |  | $ | 362
Finance | Current portion of finance lease obligation |  | 17 |  | —
Finance | Current portion of finance lease obligation - related parties |  | — |  | 648
Noncurrent |  |  |  |  |
Operating | Long-term portion of operating lease obligation |  | 393 |  | 490
Finance | Long-term portion of finance lease obligations |  | 71 |  | —
Total lease liabilities |  |  | $ | 752 |  | $ | 1,500

The following table summarizes the components of lease expense for the three and six months ended June 30, 2021 and 2020 (in thousands, unaudited):
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Lease Cost |  | Classification |  | Three Months Ended June 30, |  | Six Months Ended June 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Operating lease cost |  | Cost of sales |  | $ | 34 |  | $ | 41 |  | $ | 77 |  | $ | 80
Operating lease cost |  | Selling, general and administrative expenses |  | 46 |  | 90 |  | 123 |  | 181
Finance lease cost |  |  |  |  |  |  |  |  |  |
Amortization of leased assets |  | Depreciation |  | 6 |  | 292 |  | 9 |  | 585
Interest on lease liabilities |  | Interest expense |  | 3 |  | 135 |  | 15 |  | 296
Net lease cost |  |  |  | $ | 89 |  | $ | 558 |  | $ | 224 |  | $ | 1,142

On January 25, 2021, the Company entered into three finance lease agreements for vehicles. Under the terms of the lease agreements, the Company has total monthly principal and interest payments of $2 thousand for a 36-month period at an annual rate of 10.7%. The leases include purchase options, which are reasonably certain to occur.
In December 2019, the Company refinanced its lease agreement with a subsidiary of The Modern Group, Ltd. (“The Modern Group”) for equipment purchases totaling approximately $3.2 million. Under the terms of the lease agreement, the Company exercised its purchase option and the remaining outstanding lease obligation of approximately $648 thousand became due on January 25, 2021. The assets are now owned outright. These assets are included in the Company's property, plant and equipment, net on the consolidated balance sheets and the purchase had no effect on the net book value of these assets.
The following schedule presents the future minimum lease payments for our operating and finance obligations at June 30, 2021 (in thousands):

| Operating Leases |  | Finance Leases |  | Total
Remainder 2021 | $ | 204 |  | $ | 13 |  | $ | 217
2022 | 212 |  | 25 |  | 237
2023 | 145 |  | 25 |  | 170
2024 | 149 |  | 42 |  | 191
2025 | 25 |  | — |  | 25
Thereafter | — |  | — |  | —
Total lease payments | 735 |  | 105 |  | 840
Less: Interest | (71) |  | (17) |  | (88)
Present value of lease liabilities | $ | 664 |  | $ | 88 |  | $ | 752

Lease term and discount rates for our operating and finance lease obligations are as follows:

Lease Term and Discount Rate |  | June 30, 2021
Weighted-average remaining lease term (years) |  |
Operating leases |  | 2.7
Finance leases |  | 2.6
Weighted-average discount rate |  |
Operating leases |  | 7.2%
Finance leases |  | 10.7%

The following table summarizes the supplemental cash flow information related to leases for the six months ended June 30, 2021 and 2020:
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Other information |  | June 30, 2021 |  | June 30, 2020
|  | (In thousands)
Cash paid for amounts included in the measurement of lease liabilities |  |  |  |
Operating cash flows from operating leases |  | $ | 187 |  | $ | 237
Financing cash flows from finance leases |  | 668 |  | 1,694
Interest paid |  | 30 |  | 235
Noncash activities from right-of-use assets obtained in exchange for lease obligations: |  |  |  |
Operating leases |  | $ | — |  | $ | 73

11. Related Party Transactions
Other Purchases and Sales
During the six months ended June 30, 2021 and 2020, the Company paid Applied Cryo Technologies, Inc. (“ACT”), a company owned 51% by Crenshaw Family Holdings, LP (“Crenshaw Family Holdings”), $498 thousand and $73 thousand, respectively, for equipment, repairs and services. Casey Crenshaw, the Company's controlling shareholder, is the beneficial owner of 25% of Crenshaw Family Holdings and is deemed to jointly control Crenshaw Family Holdings with family members. During the three months ended June 30, 2021 and 2020, the Company paid ACT $132 thousand and $40 thousand, respectively, for equipment repairs and services. The Company had no sales to ACT during the three and six months ended June 30, 2021 and 2020. The Company had $0 and $2 thousand due from ACT included in accounts receivable on the unaudited condensed consolidated balance sheets at June 30, 2021 and December 31, 2020, respectively. As of June 30, 2021 and December 31, 2020, the Company had $72 thousand and $121 thousand, respectively, due to ACT included in accounts payable on the unaudited condensed consolidated balance sheets.
The Company purchases supplies and services from a subsidiary of The Modern Group. Casey Crenshaw is the beneficial owner of 25% of the Modern Group and is deemed to jointly control The Modern Group with family members. During the six months ended June 30, 2021 and 2020, the Company made purchases of supplies and services from a subsidiary of The Modern Group totaling $721 thousand and $195 thousand, respectively. During the three months ended June 30, 2021 and 2020, the Company made purchases of supplies and services totaling $191 thousand and $162 thousand, respectively. There was no receivable due from a subsidiary of The Modern Group as of June 30, 2021 and December 31, 2020. As of June 30, 2021 and December 31, 2020, the Company had $760 thousand and $582 thousand, respectively, due to a subsidiary of The Modern Group included in accounts payable on the unaudited condensed consolidated balance sheets.
Chart Energy & Chemicals, Inc. (“Chart E&C”) beneficially owns 8.4% of our outstanding common stock and is party to a Secured Term Note Payable with the Company. The Company purchases services from Chart E&C. During the six months ended June 30, 2021 and 2020, purchases from Chart E&C totaled $78 thousand and $20 thousand, respectively. During the three months ended June 30, 2021 and 2020, purchases from Chart E&C totaled $35 thousand and $10 thousand. As of June 30, 2021 and December 31, 2020, the Company had $32 thousand and $14 thousand, respectively, due to Chart E&C included in accounts payable on the unaudited condensed consolidated balance sheets.
12. Commitments and Contingencies
Environmental Matters
The Company is subject to federal, state and local environmental laws and regulations. The Company does not anticipate any expenditures to comply with such laws and regulations that would have a material impact on the Company’s condensed consolidated financial position, results of operations or liquidity. The Company believes that its operations comply, in all material respects, with applicable federal, state and local environmental laws and regulations.
Litigation, Claims and Contingencies
The Company may become party to various legal actions that arise in the ordinary course of its business. The Company is also subject to audit by tax and other authorities for varying periods in various federal, state and local jurisdictions, and disputes may arise during the course of these audits. It is impossible to determine the ultimate liabilities that the Company may incur
18

resulting from any of these lawsuits, claims, proceedings, audits, commitments, contingencies and related matters or the timing of these liabilities, if any. If these matters were to ultimately be resolved unfavorably, it is possible that such an outcome could have a material adverse effect upon the Company’s consolidated financial position, results of operations, or liquidity. The Company does not, however, anticipate such an outcome and it believes the ultimate resolution of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity. Additionally, the Company currently expenses all legal costs as they are incurred.
In October 2018, American Electric Technologies, Inc., a predecessor in interest to the Company (“American Electric”) received notification of a potential liability of $4.3 million associated with an asset purchase agreement to sell substantially all of its U.S. business assets and operations to Myers Power Products, Inc. (“Myers”). The contractual terms of the agreement included a provision for true-up of the net working capital, estimated as of the date of closing, to actual working capital as calculated by Myers and agreed to by American Electric. Any difference in the actual (conclusive) net working capital in relation to the estimated working capital at closing results in an adjustment to the purchase price. In response, American Electric disputed Myers’ claim and Myers’ working capital calculation. On November 5, 2020, the Company filed a petition in Harris County, Texas requesting a declaratory judgment in favor of the Company. During the six months ended June 30, 2021, the parties reached an amicable resolution of their differences and all claims regarding the net working capital were mutually released and the lawsuit was dismissed with prejudice to refiling same.
13. Stockholders’ Equity
Issuances of Common Stock
The Company is authorized to issue up to 37,500,000 shares of common stock, $0.001 par value per share.
During the six months ended June 30, 2021, the Company issued 500,000 shares of common stock, valued at $3.8 million, as partial consideration for the purchase of an LNG production facility in Port Allen, Louisiana. See Note 6—Property, Plant and Equipment, above, for additional information.
In addition, during the six months ended June 30, 2021, the Company issued 101,284 shares of common stock as vesting of the Restricted Stock Units under its 2019 Long Term Incentive Plan. See Note 14—Stock-Based Compensation, below, for additional information.
Issuances of Warrants
As of June 30, 2021, the Company had outstanding Warrants to purchase 62,500 shares of our common stock as follows:

Date of Issuance |  | No. of Warrants |  | Exercise Price |  | Expiration Date
Nov. 13, 2017 |  | 62,500 |  | $18.08 |  | Nov. 13, 2022

14. Stock-Based Compensation
Restricted Stock Awards
In February 2020, independent directors received 50% of their retainer fee as Restricted Stock Awards (“RSAs”). The 34,706 RSAs were issued immediately upon grant and were subject to a one year vesting period and other restrictions under the Company's 2019 Long Term Incentive Plan (the “2019 Plan”). During the six months ended June 30, 2021, the 34,706 RSAs vested.
The Company granted 61,308 RSAs under the 2019 Plan to independent directors in April 2020. The Company recognized $17 thousand and $57 thousand in stock-based compensation costs related to RSAs for the six months ended June 30, 2021 and 2020, respectively, which is included in general and administrative expenses in the unaudited condensed consolidated statements of operations. The Company recognized $38 thousand in stock-based compensation costs related to RSAs during the three months
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ended June 30, 2020. The Company did not recognize stock-based compensation costs during the three months ended June 30, 2021
As of June 30, 2021, the Company had no unrecognized compensation costs related to grants of RSAs.
Restricted Stock Units
The Company did not grant Restricted Stock Units (“RSUs”) to employees under the 2019 Plan during the six months ended June 30, 2021. The Company recognized $265 thousand and $101 thousand in stock-based compensation costs related to RSUs for the six months ended June 30, 2021 and 2020, respectively, which is included in general and administrative expenses in the unaudited condensed consolidated statements of operations. The Company recognized $120 thousand and $101 thousand in stock-based compensation costs related to RSUs during the three months ended June 30, 2021 and 2020, respectively. The Company has recognized 1,835 forfeitures, at a weighted average grant date fair value of $1.75 per share, as a reduction of expense previously recorded as general and administrative expenses in the unaudited condensed consolidated statements of operations during the six months ended June 30, 2021. During the three and six months ended June 30, 2021, a total of 101,284 awards vested.
As of June 30, 2021, the Company had $700 thousand of unrecognized compensation costs related to 675,381 outstanding RSUs, which is expected to be recognized over a weighted average period of less than two years. All units are expected to vest.
15. Income Taxes
The Company records income taxes for interim periods based on an estimated annual effective tax rate. The estimated annual effective tax rate is recomputed on a quarterly basis and may fluctuate due to changes in forecasted annual operating income, positive or negative changes to the valuation allowance for net deferred tax assets, the timing of distributions on foreign investments from which foreign taxes are withheld, and changes to actual or forecasted permanent book to tax differences.
The Company’s effective tax rate for the six months ended June 30, 2021 and 2020 was 46.5% and 4.9%, respectively. The 2021 rate reflects state and foreign income taxes and the Company’s deferred federal income tax expense generated from an expected net operating income, offset by a change in the valuation allowance on net deferred tax assets.
16. Concentration of Credit Risk
As of June 30, 2021 and December 31, 2020, two customers comprised of 52% and 47% of our net accounts receivable balance, respectively. During the three months ended June 30, 2021, revenues from three customers represented 50% of total revenues. During the three months ended June 30, 2020, revenues from one customer represented 12% of total revenues. During the six months ended June 30, 2021 and June 30, 2020, revenues from two customers represented 38% and 29% of our total revenues, respectively.
As of June 30, 2021, two vendors comprised of 40% of our net accounts payable balance. As of December 31, 2020, one vendor comprised of 15% of our net accounts payable balance. For the three months ended June 30, 2021 no vendor exceeded 10% concentration. During the three months ended June 30, 2020, cost of revenues from two vendors represented 28% of our total cost of revenues.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Form 10-Q and the consolidated financial statements included in the 2020 Annual Report on Form 10-K filed on March 16, 2021. Historical results and percentage relationships set forth in the condensed consolidated statements of operations and cash flows, including trends that might appear, are not necessarily indicative of future operations or cash flows.
Overview
Stabilis is an energy transition company that provides turnkey clean energy production, storage, transportation and fueling solutions including providing natural gas and hydrogen to multiple end markets in North America. Our diverse customer base utilizes LNG and hydrogen solutions as a fuel source in a variety of applications in the aerospace, industrial, utilities and pipelines, mining, energy, remote clean power and high horsepower transportation markets. Our customers use LNG as a partner fuel for renewable energy and as an alternative to traditional fuel sources, such as diesel, fuel oil, and propane, to reduce harmful environmental emissions and to lower fuel costs. Our customers also use LNG as a “virtual pipeline” solution when natural gas pipelines are not available or are curtailed.
Stabilis seeks to provide our customers with safe, reliable and cost effective LNG and hydrogen fueling solutions and power delivery equipment and services. We provide multiple products and services to our customers, including:
LNG Production, LNG and Hydrogen Sales—Stabilis builds and operates cryogenic natural gas processing facilities, called “liquefiers”, which convert natural gas into LNG through a multiple stage cooling process. We currently own and operate a liquefier that can produce up to 100,000 LNG gallons (379 cubic meters) per day. In June 2021 the Company purchased another LNG production facility that can produce 30,000 gallons (114 cubic meters) per day. We also purchase LNG from third-party production sources which allows us to support customers in markets where we do not own liquefiers.
Transportation and Logistics Services—Stabilis offers our customers a “virtual natural gas pipeline” by providing them with turnkey LNG transportation and logistics services in North America. We deliver LNG to our customers’ work sites from both our own production facility and our network of approximately 25 third-party production sources located throughout North America. We own a fleet of LNG fueled trucks and cryogenic trailers to transport and deliver LNG. We also outsource similar equipment and transportation services for both LNG and hydrogen from qualified third-party providers as required to support our customer base.
Cryogenic Equipment Rental—Stabilis owns and operates a rental fleet of approximately 150 mobile LNG storage and vaporization assets, including: transportation trailers, electric and gas-fired vaporizers, ambient vaporizers, storage tanks, and mobile vehicle fuelers. We also own several stationary storage and regasification assets. We believe this is one of the largest fleets of small-scale LNG equipment in North America. Our fleet consists primarily of trailer-mounted mobile assets, making delivery to and between customer locations more efficient. We deploy these assets on job sites to provide our customers with the equipment required to transport, store, and consume LNG in their fueling operations.
Engineering and Field Support Services—Stabilis has experience in the safe, cost effective, and reliable use of LNG and hydrogen in multiple customer applications. We have also developed many processes and procedures that we believe improve our customers’ use of LNG and hydrogen in their operations. Our engineers help our customers design and integrate LNG and hydrogen into their fueling operations and our field service technicians help our customers mobilize, commission and reliably operate on the job site.
Stabilis generates revenue by selling and delivering LNG and hydrogen to our customers. We also generate revenue by renting cryogenic equipment and providing engineering and field support services. We sell our products and services separately or as a bundle depending on the customer’s needs. LNG pricing depends on market pricing for natural gas and competing fuel sources (such as diesel, fuel oil, and propane among others), as well as the customer’s purchased volume, contract duration and credit profile.
Stabilis’ customers use LNG and hydrogen in their operations for multiple reasons, including lower and more stable fuel costs, reduced environmental emissions, and improved operating performance. We believe that LNG and hydrogen consumption will continue to increase in the future.
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Power Delivery—Stabilis provides power delivery equipment and services for the oil and gas, marine, power generation and broad industrial market segments in Brazil, and builds electrical systems for sale in China through our 40% interest in BOMAY.
Recent Developments
The market in which we operate has been impacted by the recent downturn in the energy market as well as the outbreak of COVID-19 and its progression into a pandemic. Various containment measures, including large-scale travel bans, border closures, quarantines, shelter-in-place orders and business and government shutdowns, have resulted in the slowing of economic growth and a reduced demand for oil and natural gas and the disruption of global manufacturing supply chains. As the COVID-19 pandemic continues to evolve, governments, corporations and other authorities may continue to implement restrictions or policies that adversely impact consumer spending, the economy, commodity prices, demand for our products, and our business, operations and share price. The ultimate extent and long-term effects of the pandemic are difficult to determine, but a prolonged period of market fluctuations and weak general economic conditions may have a material adverse effect on the Company’s financial results.
On June 1, 2021 the Company closed on the purchase of an LNG production facility in Port Allen, Louisiana. The plant is capable of producing 30,000 gpd. The facility is strategically located and will support some of Stabilis' largest customers. The facility increases the Company's total production capacity by 30%.
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Results of Operations
Three Months Ended June 30, 2021 Compared to Three Months Ended June 30, 2020
The following table reflects line items from the accompanying Consolidated Statements of Operations for the three months ended June 30, 2021 (the “Current Quarter”) as compared to the three months ended June 30, 2020 (the “Prior Year Quarter”):
Stabilis Solutions, Inc.
Consolidated Statements of Operations

| Three Months Ended June 30, |  | Change |  | % Change
| 2021 |  | 2020 |
| (unaudited) |  |  |
| (In thousands, excluding percentages)
Revenue: |  |  |  |  |  |  |
LNG product | $ | 11,812 |  |  | $ | 2,884 |  |  | $ | 8,928 |  |  | 309.6 | %
Rental, service and other | 2,580 |  |  | 1,143 |  |  | 1,437 |  |  | 125.7 |
Power delivery | 1,660 |  |  | 976 |  |  | 684 |  |  | 70.1 |
Total revenues | 16,052 |  |  | 5,003 |  |  | 11,049 |  |  | 220.8 |
Operating expenses: |  |  |  |  |  |  |
Costs of LNG product | 9,354 |  |  | 2,551 |  |  | 6,803 |  |  | 266.7 |
Costs of rental, service and other | 1,491 |  |  | 902 |  |  | 589 |  |  | 65.3 |
Costs of power delivery | 1,292 |  |  | 888 |  |  | 404 |  |  | 45.5 |
Selling, general and administrative | 3,815 |  |  | 2,368 |  |  | 1,447 |  |  | 61.1 |
Gain from disposal of fixed assets | (24) |  |  | — |  |  | (24) |  |  | 0.0 |
Depreciation | 2,218 |  |  | 2,266 |  |  | (48) |  |  | (2.1) |
Total operating expenses | 18,146 |  |  | 8,975 |  |  | 9,171 |  |  | 102.2 |
Loss from operations before equity income | (2,094) |  |  | (3,972) |  |  | 1,878 |  |  | (47.3) |
Net equity income from foreign joint ventures' operations: |  |  |  |  |  |  |
Income from investments in foreign joint ventures | 538 |  |  | 1,001 |  |  | (463) |  |  | (46.3) |
Foreign joint venture's operations related expenses | (63) |  |  | (53) |  |  | (10) |  |  | 18.9 |
Net equity income from foreign joint ventures' operations | 475 |  |  | 948 |  |  | (473) |  |  | (49.9) |
Loss from operations | (1,619) |  |  | (3,024) |  |  | 1,405 |  |  | (46.5) |
Other income (expense): |  |  |  |  |  |  |
Interest expense, net | (77) |  |  | (15) |  |  | (62) |  |  | 413.3 |
Interest expense, net - related parties | (148) |  |  | (242) |  |  | 94 |  |  | (38.8) |
Other income (expense) | 1,023 |  |  | (13) |  |  | 1,036 |  |  | (7,969.2) |
Total other income (expense) | 798 |  |  | (270) |  |  | 1,068 |  |  | (395.6) |
Loss before income tax expense | (821) |  |  | (3,294) |  |  | 2,473 |  |  | (75.1) |
Income tax expense | 183 |  |  | 169 |  |  | 14 |  |  | 8.3 |
Net loss | $ | (1,004) |  |  | $ | (3,463) |  |  | $ | 2,459 |  |  | (71.0) | %

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Segment Results
The Company’s revenues are derived from two operating segments: LNG and Power Delivery. The Company evaluates the performance of its segments based primarily on segment operating income.
LNG Segment
Our LNG segment supplies LNG to multiple end markets in North America and provides turnkey fuel solutions to help users of propane, diesel and other crude-based fuel products convert to LNG.

| Three Months Ended June 30, |  | Change |  | % Change
| 2021 |  | 2020 |
| (unaudited) |  |  |
| (In thousands, excluding percentages)
Revenue: |  |  |  |  |  |  |
LNG product | $ | 11,812 |  |  | $ | 2,884 |  |  | $ | 8,928 |  |  | 309.6 | %
Rental, service and other | 2,580 |  |  | 1,143 |  |  | 1,437 |  |  | 125.7 |
Total revenues | 14,392 |  |  | 4,027 |  |  | 10,365 |  |  | 257.4 |
Operating expenses: |  |  |  |  |  |  |
Costs of LNG product | 9,354 |  |  | 2,551 |  |  | 6,803 |  |  | 266.7 |
Costs of rental, service and other | 1,491 |  |  | 902 |  |  | 589 |  |  | 65.3 |
Selling, general and administrative | 3,230 |  |  | 1,871 |  |  | 1,359 |  |  | 72.6 |
Gain from disposal of fixed assets | (24) |  |  | — |  |  | (24) |  |  | — |
Depreciation | 2,181 |  |  | 2,234 |  |  | (53) |  |  | (2.4) |
Total operating expenses | 16,232 |  |  | 7,558 |  |  | 8,674 |  |  | 114.8 |
Income loss from operations before equity income | $ | (1,840) |  |  | $ | (3,531) |  |  | $ | 1,691 |  |  | (47.9) | %

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Power Delivery Segment
Our Power Delivery segment provides power delivery equipment and services to the global energy industry through our subsidiary in Brazil and our joint venture in China.

| Three Months Ended June 30, |  | Change |  | % Change
| 2021 |  | 2020 |
| (unaudited) |  |  |
| (In thousands, excluding percentages)
Revenue: |  |  |  |  |  |  |
Power delivery | $ | 1,660 |  |  | $ | 976 |  |  | $ | 684 |  |  | 70.1 | %
Operating expenses: |  |  |  |  |  |  |
Costs of power delivery | 1,292 |  |  | 888 |  |  | 404 |  |  | 45.5 |
Selling, general and administrative | 585 |  |  | 497 |  |  | 88 |  |  | 17.7 |
Depreciation | 37 |  |  | 32 |  |  | 5 |  |  | 15.6 |
Total operating expenses | 1,914 |  |  | 1,417 |  |  | 497 |  |  | 35.1 |
Loss from operations before equity income | (254) |  |  | (441) |  |  | 187 |  |  | (42.4) |
Net equity income from foreign joint ventures' operations: |  |  |  |  |  |  |
Income from equity investments in foreign joint ventures | 538 |  |  | 1,001 |  |  | (463) |  |  | (46.3) |
Foreign joint venture's operations related expenses | (63) |  |  | (53) |  |  | (10) |  |  | 18.9 |
Net equity income from foreign joint ventures' operations | 475 |  |  | 948 |  |  | (473) |  |  | (49.9) |
Income from operations | $ | 221 |  |  | $ | 507 |  |  | $ | (286) |  |  | (56.4) | %

Revenue
LNG Product Revenue. During the Current Quarter LNG Product Revenue increased $8.9 million or 310% versus the Prior Year Quarter primarily related to the economic recovery and overall increased business activity levels and sales expansion particularly with power generation, mining, oil & gas and aerospace customers as well as new marine customers resulting from the acquisition of our Port Allen Facility during the Current Quarter. Port Allen acquisition resulted in $0.3 million of additional revenue during the one month of June 2021.
Rental, Service, and Other Revenue. Rental, Service and Other Revenue increased by $1.4 million or 126% in the Current Quarter relative to the Prior Year Quarter due to additional equipment and labor revenues related to projects in Mexico and to oil & gas, aerospace and power generation projects.
Power Delivery. Power Delivery Revenue increased by $0.7 million or 70% in the Current Quarter due to new contracts.
Operating Expenses
Costs of LNG Product. Cost of product in the Current Quarter increased $6.8 million or 267%. The increased costs were attributable to additional gallons delivered, increased liquefaction costs, a higher gas index and higher transportation costs and operating costs for the Port Allen facility acquired during the Current Quarter. The Port Allen facility acquisition resulted in $0.2 million in incremental costs from servicing new customers and $0.1 million incremental savings from servicing existing customers. As a percentage of LNG Product Revenue, these costs decrease from 88% in the Prior Year Quarter to 79% in the Current Quarter.
Costs of Rental, Service, and Other. Costs increased $0.6 million or 65% in the Current Quarter primarily related to increased labor and equipment rentals, maintenance and travel costs to support the increase in rental, service and other revenues.
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Costs of Power Delivery. Costs increased $0.4 million or 45% in the Current Quarter due to higher activity levels associated with new contracts.
Selling, general and administrative. Selling, general and administrative expense increased $1.4 million or 61% during the Current Quarter due to higher compensation costs related to increased headcount for sales and business development personnel, commissions and incentive compensation and travel.
Depreciation. Depreciation expense decreased 2% during the Current Quarter as compared to the Prior Year Quarter due to assets reaching the end of their depreciable life, offset by June 2021 asset acquisitions.
Net Equity Income From Foreign Joint Ventures' Operations
Income from Investments in Foreign Joint Ventures. Income from investments in foreign joint ventures decreased $0.5 million during the Current Quarter due to stronger than normal sales in the Prior Year Quarter.
Operating expenses related to foreign joint ventures. Operating expenses related to BOMAY in the Current Quarter were consistent with the Prior Year Quarter.
Other Income (Expense)
Interest expense, net. Interest expense increased $(62) thousand due to interest on borrowings under our loan with Ameristate Bank in the Current Quarter.
Interest expense, net - related parties. Related party interest expense decreased $0.1 million during the Current Quarter as compared to the Prior Year Quarter primarily related to the maturity of capital leases in 2020 and January of 2021.
Other Income (Expense). Other income was $1.0 million during the Current Quarter compared to other expense of $13 thousand in the Prior Year Quarter primarily due to Paycheck Protection Program loan forgiveness recognized in the Current Quarter.
Income tax expense. The Company incurred state and foreign income tax expense of $0.2 million during the Current Quarter compared to $0.2 million during the Prior Year Quarter.
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Six Months Ended June 30, 2021 Compared to Six Months Ended June 30, 2020
The following table reflects line items from the accompanying Consolidated Statements of Operations for the six months ended June 30, 2021 (the “Current Year”) as compared to the six months ended June 30, 2020 (the “Prior Year”):
Stabilis Solutions, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except percentages)

| Six Months Ended June 30, |  | Change |  | % Change
| 2021 |  | 2020 |
| (unaudited) |  |  |  |
Revenue: |  |  |  |  |  |  |
LNG product | $ | 23,507 |  |  | $ | 12,015 |  |  | $ | 11,492 |  |  | 95.6 | %
Rental, service and other | 7,005 |  |  | 4,540 |  |  | 2,465 |  |  | 54.3 |
Power delivery | 3,204 |  |  | 2,286 |  |  | 918 |  |  | 40.2 |
Total revenues | 33,716 |  |  | 18,841 |  |  | 14,875 |  |  | 79.0 |
Operating expenses: |  |  |  |  |  |  |
Costs of LNG product | 18,166 |  |  | 8,648 |  |  | 9,518 |  |  | 110.1 |
Costs of rental, service and other | 3,732 |  |  | 2,573 |  |  | 1,159 |  |  | 45.0 |
Costs of power delivery | 2,452 |  |  | 2,135 |  |  | 317 |  |  | 14.8 |
Selling, general and administrative | 7,040 |  |  | 5,554 |  |  | 1,486 |  |  | 26.8 |
Gain from disposal of fixed assets | (24) |  |  | (11) |  |  | (13) |  |  | 118.2 |
Depreciation | 4,443 |  |  | 4,536 |  |  | (93) |  |  | (2.1) |
Total operating expenses | 35,809 |  |  | 23,435 |  |  | 12,374 |  |  | 52.8 |
Loss from operations before equity income | (2,093) |  |  | (4,594) |  |  | 2,501 |  |  | (54.4) |
Net equity income from foreign joint ventures' operations: |  |  |  |  |  |  |
Income from investments in foreign joint ventures | 959 |  |  | 887 |  |  | 72 |  |  | 8.1 |
Foreign joint venture's operations related expenses | (130) |  |  | (113) |  |  | (17) |  |  | 15.0 |
Net equity income from foreign joint ventures' operations | 829 |  |  | 774 |  |  | 55 |  |  | 7.1 |
Loss from operations | (1,264) |  |  | (3,820) |  |  | 2,556 |  |  | (66.9) |
Other income (expense): |  |  |  |  |  |  |
Interest expense, net | (94) |  |  | (26) |  |  | (68) |  |  | 261.5 |
Interest expense, net - related parties | (321) |  |  | (482) |  |  | 161 |  |  | (33.4) |
Other income | 1,113 |  |  | 25 |  |  | 1,088 |  |  | 4,352.0 |
Gain from disposal of assets |  |  |  |  | — |  |  | #DIV/0!
Total other income (expense) | 698 |  |  | (483) |  |  | 1,181 |  |  | (244.5) |
Loss before income tax expense | (566) |  |  | (4,303) |  |  | 3,737 |  |  | (86.8) |
Income tax expense | 263 |  |  | 210 |  |  | 53 |  |  | 25.2 |
Net loss | $ | (829) |  |  | $ | (4,513) |  |  | $ | 3,684 |  |  | (81.6) | %

27

Segment Results
The Company’s revenues are derived from two operating segments: LNG and Power Delivery. The Company evaluates the performance of its segments based primarily on segment operating income.
LNG Segment
Our LNG segment supplies LNG to multiple end markets in North America and provides turnkey fuel solutions to help users of propane, diesel and other crude-based fuel products convert to LNG.

| Six Months Ended June 30, |  | Change |  | % Change
| 2021 |  | 2020 |
| (unaudited) |  |  |  |
| (In thousands, excluding percentages)
Revenue: |  |  |  |  |  |  |
LNG product | $ | 23,507 |  |  | $ | 12,015 |  |  | $ | 11,492 |  |  | 95.6 | %
Rental, service and other | 7,005 |  |  | 4,540 |  |  | 2,465 |  |  | 54.3 |
Total revenues | 30,512 |  |  | 16,555 |  |  | 13,957 |  |  | 84.3 |
Operating expenses: |  |  |  |  |  |  |
Costs of LNG product | 18,166 |  |  | 8,648 |  |  | 9,518 |  |  | 110.1 |
Costs of rental, service and other | 3,732 |  |  | 2,573 |  |  | 1,159 |  |  | 45.0 |
Selling, general and administrative | 5,841 |  |  | 4,595 |  |  | 1,246 |  |  | 27.1 |
Gain from disposal of fixed assets | (24) |  |  | (11) |  |  | (13) |  |  | 118.2 |
Depreciation | 4,369 |  |  | 4,469 |  |  | (100) |  |  | (2.2) |
Total operating expenses | 32,084 |  |  | 20,274 |  |  | 11,810 |  |  | 58.3 |
Loss from operations before equity income | $ | (1,572) |  |  | $ | (3,719) |  |  | $ | 2,147 |  |  | 57.7 | %

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Power Delivery Segment
Our Power Delivery segment provides power delivery equipment and services to the global energy industry through our subsidiary in Brazil and our joint venture in China.

| Six Months Ended June 30, |  | Change |  | % Change
| 2021 |  | 2020 |
| (unaudited) |  |  |
| (In thousands, excluding percentages)
Revenue: |  |  |  |  |  |  |
Power delivery | $ | 3,204 |  |  | $ | 2,286 |  |  | $ | 918 |  |  | 40.2 | %
Operating Expenses: |  |  |  |  |  |  |
Costs of power delivery | 2,452 |  |  | 2,135 |  |  | 317 |  |  | 14.8 |
Selling, general and administrative | 1,199 |  |  | 959 |  |  | 240 |  |  | 25.0 |
Depreciation | 74 |  |  | 67 |  |  | 7 |  |  | 10.4 |
Total operating expenses | 3,725 |  |  | 3,161 |  |  | 564 |  |  | 17.8 |
Loss from operations before equity income | (521) |  |  | (875) |  |  | 354 |  |  | (40.5) |
Net equity income from foreign joint ventures' operations: |  |  |  |  |  |  |
Income from equity investments in foreign joint ventures | 959 |  |  | 887 |  |  | 72 |  |  | 8.1 |
Foreign joint venture's operations related expenses | (130) |  |  | (113) |  |  | (17) |  |  | 15.0 |
Net equity income from foreign joint ventures' operations | 829 |  |  | 774 |  |  | 55 |  |  | 7.1 |
Income (loss) from operations | $ | 308 |  |  | $ | (101) |  |  | $ | 409 |  |  | (405.0) | %

Revenue
LNG Product Revenue. During the Current Year LNG Product revenues increased $11.5 million or 96% versus the Prior Year primarily related to overall increased activity levels including with power generation, mining and aerospace customers. Port Allen acquisition resulted in $0.3 million of additional revenue during the one month of June 2021.
Rental, Service, and Other Revenue. Rental, service and other revenues increased by $2.5 million or 54% in the Current Year compared to Prior Year primarily related to overall increased activity levels including with power generation customers.
Power Delivery Revenue. Power Delivery revenue increased by $0.9 million or 40% in the Current Year due to new contracts.
Operating Expenses
Cost of LNG Product. Cost of LNG Product in the Current Year increased $9.5 million or 110%. The increased costs were attributable to additional gallons delivered, increased liquefaction costs, a higher gas index and higher transportation costs and
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costs associated with operating our Port Allen facility purchased in the Current Year. As a percentage of LNG Product Revenue, these costs increased from 72% in the Prior Year to 77% in the Current Year.
Cost of Rental, Service, and Other. This cost increased $1.2 million or 45% in the Current Year primarily related to increased labor and equipment rentals to support the increase in rental, service and other revenues.
Costs of Power Delivery. Costs increased $0.3 million or 15% in the Current Year due to costs associated with new contracts.
Selling, general and administrative. Selling, general and administrative expense in the Current Year was increased by $1.5 million or 27% with the Prior Year primarily due to higher compensation costs related to increased headcount for sales and business development personnel, commissions and incentive compensation and travel.
Depreciation. Depreciation expense decreased 2% during the Current Year as compared to the Prior Year due to assets reaching the end of their depreciable life, offset by June 2021 asset acquisitions.
Net Equity Income From Foreign Joint Ventures' Operations
Income from Investments in Foreign Joint Ventures. Income from investments in foreign joint ventures increased 8% from the Prior Year.
Operating expenses related to foreign joint ventures. Operating expenses related to BOMAY in the Current Year were consistent with the Prior Year .
Other Income (Expense)
Interest expense, net. Interest expense in the Current Year increased $0.1 million due to interest associated with the Ameristate loan facility, working capital loan in Brazil and vehicle leases.
Interest expense, net - related parties. Related party interest expense decreased $0.2 million during the Current Year as compared to the Prior Year primarily related to the maturity of capital leases in 2020 and January of 2021.
Other income (expense). Other income was $1.1 million in the Current Year compared to income of $25 thousand in the Prior Year related to the Paycheck Protection Program loan forgiveness and the release of escrow funds from the Myers transaction settlement during the Current
Gain on the disposal of fixed assets. The gain from disposal of rolling stock was in the Prior Year compared to in the Current Year.
Income tax expense. The Company incurred foreign tax expense of $0.3 million during the Current Year compared to $0.2 million during the Prior Year.
Liquidity and Capital Resources
Overview
As of June 30, 2021, we had $3.3 million in cash and cash equivalents on hand and $11.9 million in outstanding debt and finance lease obligations (of which $3.6 million is due in the next twelve months).
We have historically funded the business primarily through cash flows from operations, short-term notes payable, debt from finance companies and related parties, and capital contributions. We have used a portion of our cash flows to invest in fixed assets to support growth. We have also used cash to pay interest and principal amounts outstanding under our borrowings.
The Company is subject to substantial business risks and uncertainties inherent in the LNG industry. There is no assurance that the Company will be able to generate sufficient cash flows in the future to sustain itself or to support future growth.
The Company has recently seen an increase in activity and additional revenue opportunities. Accordingly, management believes the business will generate sufficient cash flows from its operations to fund the business for the next 12 months.
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Cash Flows
Cash flows provided by (used in) our operating, investing and financing activities are summarized below (in thousands):

| Six Months Ended June 30, |  |
| 2021 |  | 2020 |  |  |  |
| (unaudited) |  |  |  |
Net cash provided by (used in): |  |  |  |  |  |  |
Operating activities | $ | 2,611 |  |  | $ | 4,323 |  |  |  |  |
Investing activities | (5,659) |  |  | (269) |  |  |  |  |
Financing activities | 4,518 |  |  | (815) |  |  |  |  |
Effect of exchange rate changes on cash | 29 |  |  | (162) |  |  |  |  |
Net increase (decrease) in cash and cash equivalents | 1,499 |  |  | 3,077 |  |  |  |  |
Cash and cash equivalents, beginning of period | 1,814 |  |  | 3,979 |  |  |  |  |
Cash and cash equivalents, end of period | $ | 3,313 |  |  | $ | 7,056 |  |  |  |  |

Operating Activities
Net cash provided by operating activities totaled $2.6 million for the six months ended June 30, 2021 compared to $4.3 million for the same period 2020. The decrease in net cash provided by operating activities of $1.7 million as compared to the Prior Year was primarily attributable to a reduced distribution from our BOMAY joint venture and increased working capital requirements.
Investing Activities
Net cash used in investing activities totaled $5.7 million and $0.3 million for the six months ended June 30, 2021 and 2020, respectively. The increase in net cash used was primarily due to the acquisition of the LNG plant in Port Allen, Louisiana and purchases of vaporizers and other LNG equipment.
Financing Activities
Net cash provided by financing activities totaled $4.5 million for the six months ended June 30, 2021, compared to net cash used in financing activities totaling $0.8 million for the comparable prior year period. The change compared to Prior Year was primarily attributable to proceeds from the Ameristate Bank loan facility.
Sources of Liquidity and Capital Resources
During the Current Year, our principal sources of liquidity were cash provided by our operations and the USDA Loan. Historically, our principal sources of liquidity have consisted of cash on hand, cash provided by our operations, and distributions from our BOMAY joint venture. In addition, the Company obtained equipment financing from MG Finance, a related party. The Company also obtained financing with AmeriState Bank to provide for an advancing loan facility in the aggregate principal amount of up to $10.0 million, The Company is evaluating additional financing alternatives, however, there is no guarantee that additional financing will be available or available at terms that would be beneficial to shareholders.
Future Cash Requirements
Uses of Liquidity and Capital Resources
We require cash to fund our operating expenses and working capital requirements, including costs associated with fuel sales, capital expenditures, debt repayments and repurchases, equipment purchases, maintenance of LNG production facilities, mergers and acquisitions (if any), pursuing market expansion, supporting sales and marketing activities, support of legislative and regulatory initiatives, and other general corporate purposes. While we believe we have sufficient liquidity and capital resources to fund our operations and repay our debt, we may elect to pursue additional financing activities such as refinancing existing debt, or debt or equity offerings to provide flexibility with our cash management. Certain of these alternatives may require the consent of current lenders or stockholders, and there is no assurance that we will be able to execute any of these alternatives on acceptable terms or at all.
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Debt Level and Debt Compliance
We had total indebtedness of $11.9 million in principal as of June 30, 2021 with the expected maturities as follows (in thousands).

| June 30, 2021
Remainder 2021 | $ | 2,271
2022 | 2,852
2023 | 131
2024 | 684
2025 | 1,000
Thereafter | 5,333
| $ | 12,271 |
Debt issuance costs | (410)
Total long-term debt, including current maturities | $ | 11,861 |

We expect our total interest payment obligations relating to our indebtedness to be approximately $0.8 million for the full year ending December 31, 2021. Certain of the agreements governing our outstanding debt have certain covenants with which we must comply. As of June 30, 2021, we were in compliance with all of these covenants.
Off-Balance Sheet Arrangements
As of June 30, 2021, we had no transactions that met the definition of off-balance sheet arrangements that may have a current or future material effect on our consolidated financial position or operating results.
NEW ACCOUNTING STANDARDS
See Note 2—Recent Accounting Pronouncements to the Notes to Condensed Consolidated Financial Statements included elsewhere in this report for information on new accounting standards.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities known to exist at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We evaluate our estimates on an ongoing basis, based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. There can be no assurance that actual results will not differ from those estimates.
Critical Accounting Policies
Revenue Recognition
The Company recognizes revenue associated with the sale of LNG at the point in time when the customer obtains control of the asset. In evaluating when a customer has control of the asset, the Company primarily considers whether the transfer of legal title and physical delivery has occurred, whether the customer has significant risks and rewards of ownership, and whether the customer accepted delivery and a right of payment exists. Revenues from the providing of services, transportation and equipment to customers is recognized as the service is performed.
Revenue is measured as consideration specified in a contract with a customer and excludes any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. Amounts are billed upon completion of service or transfer of a product and are generally due within 30 days.
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Revenues from contracts with customers are disaggregated into (1) LNG product, (2) rental, service, and other, and (3) power delivery.
LNG product revenue generated includes the revenue from the product and delivery of the LNG to our customer’s location. Product revenue is recognized upon delivery of the related item to the customer, at which point the customer controls the product and the Company has an unconditional right to payment. Product contracts are established by agreeing on a sales price or transaction price for the related item. Revenue is recognized when the customer has taken control of the product. Payment terms for product contracts are generally within thirty days from the receipt of the invoice. The Company acts as a principal when using third party transportation companies and therefore recognizes the gross revenue for the delivery of LNG.
Rental, service and other revenue generated by the Company includes equipment and human resources provided to the customer to support the use of LNG and power delivery equipment and services in their application. Rental contracts are established by agreeing on a rental price or transaction price for the related piece of equipment and the rental period which is generally daily or monthly. The Company maintains control of the equipment that the customer uses and can replace the rented equipment with similar equipment should the rented equipment become inoperable or the Company chooses to replace the equipment for maintenance purposes. Revenue is recognized as the rental period is completed and for periods that cross month end, revenue is recognized for the portion of the rental period that has been completed to date. Payment terms for rental contracts are generally within thirty days from the receipt of the invoice. Performance obligations for rental revenue are considered to be satisfied as the rental period is completed based upon the terms of the related contract. LNG service revenue generated by the Company consists of mobilization and demobilization of equipment and onsite technical support while customers are consuming LNG in their applications. Service revenue is billed based on contractual terms that can be based on an event (i.e. mobilization or demobilization) or an hourly rate. Revenue is recognized as the event is completed or work is done. Payment terms for service contracts are generally within thirty days from the receipt of the invoice. Performance obligations for service revenue are considered to be satisfied as the event is completed or work is done per the terms of the related contract.
Power Delivery revenue is generated from time and material projects, consulting services, and the resale of electrical and instrumentation equipment. Revenue is billed based on contractual terms that can be based on an event or an hourly rate. Revenue is recognized as the event is completed or work is done. Payment terms for service contracts are generally within thirty days from the receipt of the invoice. Performance obligations for service revenue are considered to be satisfied as the event is completed or work is done per the terms of the related contract. The resale of electrical and instrumentation equipment is billed upon delivery and are generally due within thirty days from the receipt of the invoice.
All outstanding accounts receivable, net of allowance, on the consolidated balance sheet are typically due and collected within the next 30 days for our LNG business and 12 months for our power delivery business.
Impairment of Long-Lived Assets and Goodwill
LNG liquefaction facilities, and other long-lived assets held and used by the Company are reviewed periodically for potential impairment whenever events or changes in circumstances indicate that a particular asset’s carrying value may not be recoverable. Recoverability generally is determined by comparing the carrying value for the asset to the expected undiscounted future cash flows of the asset. If the carrying value of the asset is not recoverable, the amount of impairment loss is measured as the excess, if any, of the carrying value of the asset over its estimated fair value. The estimated undiscounted future cash flows are based on projections of future operating results; these projections contain estimates of the value of future contracts that have not yet been obtained, future commodity pricing and our future cost structure, among others. Projections of future operating results and cash flows may vary significantly from actual results. Management reviews its estimates of cash flows on an ongoing basis using historical experience, business plans, overall market conditions, and other factors.
Goodwill represents the excess of the cost of an acquired entity over the fair value of the identifiable assets acquired less liabilities assumed. Intangible assets are assets that lack physical substance (excluding financial assets). Goodwill acquired in a business combination and intangible assets with indefinite useful lives are not amortized, and intangible assets with finite useful lives are amortized. Goodwill and intangible assets not subject to amortization are tested for impairment annually or more frequently if events or changes in circumstances indicate the assets carrying value may not be recoverable. We currently test goodwill for impairment annually in the third quarter unless we determine that a triggering event has occurred requiring an earlier test.
Income Taxes
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Deferred income taxes are accounted for under the asset-and-liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. 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 on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded when it is more likely than not that the deferred tax asset will not be realized.
The Company recognizes the effect of income tax positions only if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest related to unrecognized tax benefits in interest expense and penalties in selling, general and administrative expenses.
Fair Value Measurements
The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in the fair value measurements, the fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels in accordance with U.S. GAAP:
Level 1 Inputs—Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.
Level 2 Inputs—Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 Inputs—Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby, allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a “smaller reporting company”, the Company is not required to provide this information.
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ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon the evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective at June 30, 2021.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during our last fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company becomes involved in various legal proceedings and claims in the normal course of business. In management’s opinion, the ultimate resolution of these matters will not have a material effect on our financial position or results of operations.
ITEM 1A. RISK FACTORS.
Our operations and financial results are subject to various risks and uncertainties, including those described in the Part I. “Item 1A. Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission on March 16, 2021 (“Form 10-K”), which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common stock. There have been no material changes in our risk factors disclosed in our 2020 Form 10-K.
ITEM 5. OTHER INFORMATION.
None.
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ITEM 6. EXHIBITS.
(a) Index to Exhibits

Exhibit No. |  | Exhibit Description
2.1 |  | (1) Share Exchange Agreement, dated December 17, 2018, by and among American Electric Technologies, Inc., LNG Investment Company, LLC, AEGIS NG LLC, Stabilis Energy, LLC, and PEG Partners, LLC (Incorporated by reference to Registrant’s Current Report on Form 8-K filed December 24, 2018)
2.2 |  | (1) Amendment dated May 8, 2019 to the Share Exchange Agreement concerning the business combination with Stabilis (Incorporated by reference to Exhibit 2.1 to Registrant’s Current Report on Form 8-K filed May 9, 2019)
3.1 |  | Amended and Restated Articles of Incorporation of the Registrant (Incorporated by Reference to Exhibit 3.1 to Registrant’s Current Report on Form 8-K filed October 15, 2020)
3.2 |  | Amended and Restated Bylaws of the Registrant (Incorporated by Reference to Exhibit 3.2 to Registrant’s Current Report on Form 8-K filed September 18, 2020)
4.1 |  | Investors Rights Agreement between Registrant and JCH Crenshaw Holdings, LLC dated May 2, 2012 (Incorporated by reference to Exhibit 4.3 to Registrant’s Quarterly Report on Form 10-Q filed on August 14, 2012)
4.2 |  | Registration Rights Agreement between Registrant and JCH Crenshaw Holdings, LLC dated May 2, 2012 (Incorporated by reference to Exhibit 4.4 to Registrant’s Quarterly Report on Form 10-Q filed on August 14, 2012)
4.3 |  | Warrant to Purchase Common Stock dated November 13, 2017, issued to HD Special-Situations III, LP (Incorporated by reference to Exhibit 10.3 to Registrant’s Quarterly Report on Form 10-Q filed on November 14, 2017)
4.4 |  | Registration Rights Agreement dated November 13, 2017 between Registrant and HD Special-Situations III, LP (Incorporated by reference to Exhibit 10.4 to Registrant’s Quarterly Report on Form 10-Q filed on November 14, 2017)
4.5 |  | Voting Agreement, dated as of December 17, 2018, by and among JCH Crenshaw Holdings, LLC and certain stockholders of Registrant (Incorporated by reference to Exhibit B of Amendment No. 8 to Schedule 13D filed by JCH Crenshaw Holdings, LLC and J. Casey Crenshaw on December 28, 2018)
4.6 |  | Registration Rights Agreement dated July 26, 2019, by and among Registrant, LNG Investment Company, LLC, and AEGIS NG LLC (Incorporated by Reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed August 1, 2019)
4.7 |  | Registration Rights Agreement dated as of August 20, 2019, by and among Registrant and the Investors named therein (Incorporated by Reference to Exhibit 4.9 to Registrant's Registration Statement on Form S-1 filed September 11, 2019)
10.1 |  | Loan Agreement, dated April 8, 2021, between Stabilis Solutions, Inc., as borrower, and AmeriState Bank, as lender (Incorporated by Reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K filed April 13, 2021)
10.2 |  | Form of Advancing Note, dated April 8, 2021, executed by Stabilis Solutions, Inc., as borrower, and made payable to AmeriState Bank, as lender (Incorporated by Reference to Exhibit 10.2 to Registrant's Current Report on Form 8-K filed April 13, 2021)
10.3 |  | Security Agreement and Assignment, dated April 8, 2021, among Mile High LNG LLC, Stabilis GDS, Inc., Stabilis LNG Eagle Ford LLC and Stabilis Energy Services, LLC, to and in favor of AmeriState Bank, as the secured party (Incorporated by Reference to Exhibit 10.3 to Registrant's Current Report on Form 8-K filed on April 13, 2021)
10.4 |  | *Asset Purchase and Sale Agreement, dated May 25, 2021, among HR Nu Blu Energy, LLC and TGB Equipment Leasing, LLC as "Sellers" and Stabilis Solutions, Inc. as "Buyer"
10.5 |  | *R egistrati on Rights Agreement, dat ed J une 1, 2021, among T GB E quipment Leasing, LLC and Stabilis
31.1 |  | *Rule 13a-14(a) / 15d-14(a) Certification of Principal Executive Officer.
31.2 |  | *Rule 13a-14(a) / 15d-14(a) Certification of Principal Financial Officer.

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Exhibit No. |  | Exhibit Description
32.1 |  | *Section 1350 Certifications of Principal Executive Officer and Principal Financial Officer.
101.INS |  | XBRL Instance Document.
101.SCH |  | XBRL Taxonomy Extension Schema Document.
101.CAL |  | XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF |  | XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB |  | XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE |  | XBRL Taxonomy Extension Presentation Linkbase Document.

(1)Exhibits and schedules to the Share Exchange Agreement and Amendment have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Registrant hereby undertakes to furnish supplemental copies of any of the omitted exhibits and schedules upon request by the U.S. Securities and Exchange Commission.
* Filed herewith.
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SIGNATURES
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.

Date: August 5, 2021 |
STABILIS SOLUTIONS, INC. |
By: | /s/ James C. Reddinger |
| James C. Reddinger |
| President and Chief Executive Officer (Principal Executive Officer) |
By: | /s/ Andrew L. Puhala |
| Andrew L. Puhala |
| Chief Financial Officer (Principal Financial Officer) |

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