10-Q

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 March 31, 2023

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

For the transition period from                 to

Commission file number. 001-40364

____________________

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 May 10, 2023, there were 18,478,829 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 March 31, 2023

		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	19
Item 4.	Controls and Procedures	24
	Part II. Other Information
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 5.	Other Information	24
Item 6.	Exhibits	25
Signatures		26

2

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q ("this Report") includes statements that constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements represent intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks and uncertainties and other factors. 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, 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 necessary estimates reflecting the best judgment of senior management, not guarantees of future performance. Many of the factors that impact forward-looking statements are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements as described in Part I. “Item 1A. Risk Factors” of the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission ("the SEC") on March 9, 2023, as well as the additional risk factors identified and described in Part II. “Item 1A. Risk Factors” of this Report.

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 Report, 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)

	March 31, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	6,861	$	11,451
Accounts receivable, net	9,696		16,326
Inventories, net	70		205
Prepaid expenses and other current assets	1,402		2,186
Assets held for sale	—		2,049
Total current assets	18,029		32,217
Property, plant and equipment:
Cost	109,651		103,368
Less accumulated depreciation	(57,722)		(55,699)
Property, plant and equipment, net	51,929		47,669
Goodwill	4,314		4,314
Investments in foreign joint ventures	12,092		11,606
Right-of-use assets and other noncurrent assets	563		774
Total assets	$	86,927	$	96,580
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	3,173	$	4,474
Accrued liabilities	10,681		19,642
Current portion of long-term notes payable	489		848
Current portion of long-term notes payable - related parties	1,839		2,435
Current portion of finance and operating lease obligations	156		133
Total current liabilities	16,338		27,532
Long-term notes payable, net of current portion and debt issuance costs	8,661		8,650
Long-term portion of finance and operating lease obligations	112		183
Other noncurrent liabilities	89		348
Total liabilities	25,200		36,713
Commitments and contingencies (Note 11)
Stockholders’ Equity:
Preferred stock; $0.001 par value, 1,000,000 shares authorized, no shares issued and outstanding at March 31, 2023 and December 31, 2022	—		—
Common stock; $0.001 par value, 37,500,000 shares authorized, 18,433,654 and 18,420,067 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	19		19
Additional paid-in capital	100,726		100,137
Accumulated other comprehensive income	269		82
Accumulated deficit	(39,287)		(40,371)
Total stockholders’ equity	61,727		59,867
Total liabilities and stockholders’ equity	$	86,927	$	96,580

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 March 31,
	2023		2022
Revenues:
Revenues	$	26,842	$	20,267
Operating expenses:
Cost of revenues	20,270		15,504
Change in unrealized loss on natural gas derivatives	169		—
Selling, general and administrative expenses	3,379		2,931
Gain from disposal of fixed assets	—		(80)
Depreciation expense	2,011		2,277
Total operating expenses	25,829		20,632
Income (loss) from operations before equity income	1,013		(365)
Net equity income from foreign joint venture operations:
Income from equity investment in foreign joint venture	393		161
Foreign joint venture operating related expenses	(48)		(74)
Net equity income from foreign joint venture operations	345		87
Income (loss) from operations	1,358		(278)
Other income (expense):
Interest expense, net	(150)		(137)
Interest expense, net - related parties	(32)		(31)
Other income (expense), net	(84)		(45)
Total other income (expense)	(266)		(213)
Net income (loss) from continuing operations before income tax benefit (expense)	1,092		(491)
Income tax benefit (expense)	(8)		132
Net income (loss) from continuing operations	1,084		(359)
Loss from discontinued operations, net of income tax	—		(47)
Net income (loss)	$	1,084	$	(406)
Net income (loss) per common share (Note 13):
Basic net income (loss) per common share from continuing operations	$	0.06	$	(0.02)
Basic loss per common share from discontinued operations	$	—	$	—
Basic net income (loss) per common share	$	0.06	$	(0.02)
Diluted net income (loss) per common share from continuing operations	$	0.06	$	(0.02)
Diluted loss per common share from discontinued operations	$	—	$	—
Diluted net income (loss) per common share	$	0.06	$	(0.02)

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 March 31,
	2023		2022
Net income (loss)	$	1,084	$	(406)
Foreign currency translation adjustment, net of tax	187		377
Total comprehensive income (loss)	$	1,271	$	(29)

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			Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total
	Shares	Amount
Balance at December 31, 2022	18,420,067	$	19	$	100,137	$	82	$	(40,371)	$	59,867
Common stock issued from vesting of stock-based awards	13,587	—		—		—		—		—
Stock-based compensation	—	—		589		—		—		589
Net income	—	—		—		—		1,084		1,084
Other comprehensive income, net of tax	—	—		—		187		—		187
Balance at March 31, 2023	18,433,654	$	19	$	100,726	$	269	$	(39,287)	$	61,727

	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total
	Shares	Amount
Balance at December 31, 2021	17,691,268	$	18	$	97,875	$	351	$	(37,185)	$	61,059
Common stock issued from vesting of stock-based awards	501,334	—		—		—		—		—
Stock-based compensation	—	—		531		—		—		531
Net loss	—	—		—		—		(406)		(406)
Other comprehensive income, net of tax	—	—		—		377		—		377
Balance at March 31, 2022	18,192,602	$	18	$	98,406	$	728	$	(37,591)	$	61,561

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)

	Three Months Ended March 31,
	2023		2022
Cash flows from operating activities:
Net income (loss) from continuing operations	$	1,084	$	(359)
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by operating activities:
Depreciation	2,011		2,277
Stock-based compensation expense	589		531
Income from equity investment in joint venture	(393)		(161)
Realized and unrealized losses on natural gas derivatives	421		—
Changes in operating assets and liabilities:
Accounts receivable	2,044		1,672
Prepaid expenses and other current assets	507		342
Accounts payable and accrued liabilities	(6,361)		(1,684)
Other	191		(156)
Net cash provided by operating activities from continuing operations	93		2,462
Net cash provided by operating activities from discontinued operations	—		693
Net cash provided by operating activities	93		3,155
Cash flows from investing activities:
Acquisition of fixed assets	(3,727)		(690)
Proceeds from sale of fixed assets	—		100
Net cash used in investing activities from continuing operations	(3,727)		(590)
Net cash used in investing activities from discontinued operations	—		(228)
Net cash used in investing activities	(3,727)		(818)
Cash flows from financing activities:
Payments on short- and long-term notes payable	(365)		(414)
Payments on notes payable and finance leases from related parties	(596)		(669)
Net cash used in financing activities from continuing operations	(961)		(1,083)
Net cash used in financing activities from discontinued operations	—		(49)
Net cash used in financing activities	(961)		(1,132)
Effect of exchange rate changes on cash	5		(3)
Net increase (decrease) in cash and cash equivalents	(4,590)		1,202
Cash and cash equivalents, beginning of period	11,451		910
Cash and cash equivalents, end of period	$	6,861	$	2,112

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. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business

Stabilis Solutions, Inc. and its subsidiaries (the “Company”, “Stabilis”, “our”, “us” or “we”) is an energy transition company that provides turnkey clean energy production, storage, transportation and fueling solutions primarily using liquefied natural gas (“LNG”) to multiple end markets.

The Company serves customers in diverse end markets, including aerospace, agriculture, energy, industrial, marine bunkering, mining, pipeline, remote power and utility markets. LNG can be used to deliver natural gas to locations where pipeline service is unavailable, has been interrupted, or needs to be supplemented. Additionally, LNG can be used as a partner fuel for renewable energy, and as an alternative to traditional fuel sources, such as distillate fuel oil (including diesel fuel and other fuel oils) and propane, among others to provide both environmental and economic benefits.

The Company also builds power and control systems for the energy industry in China through its 40% owned Chinese joint venture, BOMAY Electric Industries, Inc (“BOMAY”). BOMAY is accounted for as an equity investment.

Basis of Presentation and Consolidation

The accompanying unaudited, interim condensed consolidated financial statements ("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 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 prevent the information presented herein from being misleading. The 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 periods presented are not necessarily indicative of the results of operations to be expected for the full year. The accompanying Condensed Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2022 included in the Company's Annual Report on Form 10-K, as filed on March 9, 2023.

All intercompany accounts and transactions have been eliminated in consolidation. In the Notes to Condensed Consolidated Financial Statements, all dollar amounts in tabulations are in thousands, unless otherwise indicated.

The Company believes that the Brazil Operations sold on October 31, 2022, met the criteria for discontinued operations presentation. The classification of these assets, liabilities, results of operations and cash flows as discontinued operations requires retrospective application to financial information for all prior periods presented. Accordingly, the operating results and cash flows for the three months ended March 31, 2022, have been recast on our Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows, respectively. There were no assets and liabilities from discontinued operations as of March 31, 2023 or December 31, 2022, and no results of operations or cash flows for the three months ended March 31, 2023. Unless otherwise noted, the amounts presented throughout the notes to our Financial Statements relate to our continuing operations. See Note 2 for further discussion of the Company's discontinued operations.

Use of Estimates in the Preparation of the Consolidated Financial Statements

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 fair value of natural gas derivatives, 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.

9

Derivative instruments

The Company had certain natural gas derivative instruments as of March 31, 2023 and December 31, 2022. The Company recognizes all of its derivative instruments as either assets or liabilities which are recorded at fair value on its Condensed Consolidated Balance Sheet. The accounting for changes in the fair value of a derivative instrument depends on whether it qualifies for and has been designated as a hedge as well as the type of hedge. The Company has not designated its derivatives as hedges under U.S. GAAP and all resulting gains and losses from changes in the fair value of its derivative instruments are included within the Condensed Consolidated Statements of Operations. The Company did not enter into any derivative transactions for speculative purposes. See Note 4 for further discussion of the Company's derivatives.

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses - Measurement of Credit Losses on Financial Instruments,” which changes the way companies evaluate credit losses for most financial assets and certain other instruments. For receivables, and other short-term financial instruments, companies will be required to use a new forward-looking “expected loss” model to evaluate impairment, potentially resulting in earlier recognition of allowances for losses. The new standard also requires enhanced disclosures, including the requirement to disclose the information used to track credit quality by year of origination. ASU No. 2016-13 was effective for the Company in the first quarter 2023. Adoption of this standard had no material impact to the Company's Condensed Consolidated Financial Statements.

2. DISCONTINUED OPERATIONS

On October 31, 2022, the Company entered into a sales agreement and closed on the sale of its Brazil Operations. The Company believes that the sale of the Brazil Operations met the criteria for discontinued operations presentation, as the sale of the Brazil Operations represented a strategic shift of future operations of the Company. Further, the Brazil Operations had separately reported financial information available, as the Brazil Operations represented substantially all of the revenue and expenses of the Company's previously reported Power Delivery segment.

The classification of these assets, liabilities, results of operations and cash flows as discontinued operations requires retrospective application to financial information for all prior periods presented. Accordingly, for the 2022 periods, preceding the sale, the Condensed Consolidated Financial Statements and related notes have been recast to separately state the revenues and expenses and cash flows between its continuing operations and the discontinued operations. The Company had no assets and liabilities related to the Brazil Operations at March 31, 2023 or December 31, 2022. In addition, the Company had no results of operations nor cash flows for the three months ended March 31, 2023.

The following table summarizes the components of income from discontinued operations for the periods presented (in thousands):

	Three Months Ended March 31,
	2023		2022
Revenue	$	—	$	2,766
Costs and expenses	—		2,793
Other income (expense), net	—		(17)
Loss from discontinued operations before income taxes	$	—	$	(44)
Income tax expense	—		3
Loss from discontinued operations, net of income taxes	$	—	$	(47)

Segment Reporting

As a result of the classification of the Brazil Operations as discontinued operations, the Company believes that it only has one reporting segment.

10

3. REVENUE RECOGNITION

We recognize revenues when the transfer of promised goods or services are delivered to our customers in accordance with the applicable customer contract and we are entitled to be paid by the customer. Revenues are measured as consideration specified in the contract and exclude any sales incentives and amounts collected on behalf of third parties. Amounts are billed upon completion of service or transfer of a product and are generally due within 30 days. Revenues from contracts with customers are disaggregated into (1) LNG product (2) rental (3) service and (4) other.

LNG product revenue generated includes the revenue from the production and delivery of LNG to our customer’s location. Product contracts are established by agreeing on a sales price or transaction price for the related item. 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. The Company acts as a principal when using third party transportation companies and therefore recognizes the gross revenue for the delivery of LNG. The Company enters into forward sales contracts for the delivery of LNG to its customers. Certain of these sales contracts contain provisions that may meet the criteria of a derivative in the event delivery is not made. These contracts are accounted for under the normal purchase normal sales exclusion under U.S. GAAP and are not measured at fair value each reporting period.

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 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. Revenues related to rental of equipment are recognized under Topic 606 and not ASC 842: Leases, as 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. 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. 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.

Variable and Other Revenue Components

Certain of our contracts may include rental or services that may vary upon the customer demands at stated rates within the contract and are satisfied as the work is authorized by the customer and performed by the Company. LNG product sales agreements may include both fixed and variable fees per gallon of LNG, but is representative of the stand-alone selling price for LNG at the time the contract was negotiated. We have concluded that the variable LNG fees meet the exception for allocating variable consideration to specific parts of the contract. As such, the variable consideration for these contracts is allocated to each distinct gallon of LNG and recognized when that distinct gallon of LNG is delivered to the customer.

Taxes assessed by a governmental authority that are directly imposed on revenue-producing transactions between the Company and its customers, such as sales, use and value-added taxes, are excluded from revenue.

Disclosure: Disaggregated Revenues

The table below presents revenue disaggregated by source, for the three months ended March 31, 2023 and 2022 (in thousands):

	Three Months Ended March 31,
Revenues:	2023		2022
LNG Product	$	21,905	$	16,785
Rental	2,247		1,986
Service	2,066		1,395
Other	624		101
Total revenues	$	26,842	$	20,267

11

The table below presents revenue disaggregated by geographic location, for the three months ended March 31, 2023 and 2022 (in thousands):

	Three Months Ended March 31,
Revenues:	2023		2022
Mexico	$	2,819	$	3,766
United States	24,023		16,501
Total revenues	$	26,842	$	20,267

4. DERIVATIVE INSTRUMENTS

As of March 31, 2023 and December 31, 2022, the Company held a series of call options (“the Call Options”) for the purchase of natural gas related to customer commitments. The Call Options are for a total of 1.1 million MMBtu (million British thermal units) of natural gas at March 31, 2023 which extend into the second quarter of 2024. The Company purchased the Call Options to manage the risk of increasing natural gas prices above what it can charge its customers. The Company may also enter into other derivative transactions when beneficial. Except for contracts qualifying for the normal purchase normal sales exception, as further described below, the Company recognizes all of its derivative instruments as either assets or liabilities which are recorded at fair value on its Condensed Consolidated Balance Sheet. The fair value of the Call Options are predominantly determined from broker quotes and are considered a level 2 fair value measurement. The following table presents the location and fair value of the Call Options at March 31, 2022 and December 31, 2022 on the Company's Condensed Consolidated Balance Sheets (in thousands):

Location on Condensed Consolidated Balance Sheet	March 31, 2023(1)		December 31, 2022(1)
Prepaid expenses and other current assets (2)	$	138	$	347
Right-of-use assets and other noncurrent assets (2)	13		225
	$	151	$	572

_______________

(1)    Amounts are presented on a gross basis.

(2)    The classification between current and noncurrent assets is based upon when the Call Options mature.

The Company has not designated the Call Options as a hedge under U.S. GAAP and all resulting gains and losses from changes in the fair value of its derivative instruments are included within change in unrealized loss on natural gas derivatives within the Company's Condensed Consolidated Statements of Operations. The table below presents the changes in the fair value of the Call Options for the three and three months ended March 31, 2023 as well as their net realized gains and losses.

	Three Months Ended March 31,
Changes in fair value of derivatives	2023		2022(1)
Fair value of natural gas derivatives, beginning of period	$	572	$	—
Unrealized gains (losses) transferred to realized gains (losses), net (3)	(252)		—
Change in unrealized loss on natural gas derivatives (2)	(169)		—
Fair value of natural gas derivatives, end of period	$	151	$	—
	Three Months Ended March 31,
Realized gain (loss) from derivative instruments	2023		2022(1)
Unrealized gains (losses) transferred to realized gains (losses), net	$	(252)	$	—
Derivative settlement payments received (3)	—		—
Realized gain (loss) from natural gas derivatives, net (3)	$	(252)	$	—

12

_______________

(1)    The Company did not have any derivative instruments during the three months ended March 31, 2022.

(2)    Amounts are presented as their own separate line item within the Company's Condensed Consolidated Statements of Operations.

(3)    Amounts are included within cost of LNG product on the Company's Condensed Consolidated Statements of Operations.

The Company also enters into forward contracts for purchases of natural gas and/or electricity to meet liquefaction requirements and forward sales contracts for the delivery of LNG to its customers. These contracts are not accounted for as derivatives, but accounted for under the normal purchase normal sales exclusion under U.S. GAAP and are not measured at fair value each reporting period.

5. PREPAID EXPENSES AND OTHER CURRENT ASSETS

The Company’s prepaid expenses and other current assets at March 31, 2023 and December 31, 2022 consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
Prepaid insurance	$	712	$	990
Prepaid supplier expenses	232		286
Other receivables	103		254
Natural gas derivatives at fair value, current	138		347
Deposits	203		236
Other	14		73
Total prepaid expenses and other current assets	$	1,402	$	2,186

6. PROPERTY, PLANT AND EQUIPMENT

The Company’s property, plant and equipment at March 31, 2023 and December 31, 2022 consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
Liquefaction plants and systems	$	47,645	$	47,636
Real property and buildings	2,065		2,057
Vehicles and tanker trailers and equipment	52,936		52,647
Computer and office equipment	459		470
Construction in progress	6,516		527
Leasehold improvements	30		31
	109,651		103,368
Less: accumulated depreciation	(57,722)		(55,699)
	$	51,929	$	47,669

Depreciation expense totaled $2.0 million and $2.3 million for the three months ended March 31, 2023 and 2022, respectively, all of which is included in the Condensed Consolidated Statements of Operations as a separate line item.

7. INVESTMENT IN FOREIGN JOINT VENTURE

The Company holds a 40% interest in BOMAY, which builds electrical systems. 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 during the three months ended March 31, 2023 and 2022.

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The tables below present a summary of BOMAY's assets and liabilities and equity at March 31, 2023 and December 31, 2022, and its operational results for the three months ended March 31, 2023 and 2022 in U.S. dollars (in thousands):

	March 31, 2023		December 31, 2022
Assets:
Total current assets	$	92,669	$	88,536
Total non-current assets	2,964		3,016
Total assets	$	95,633	$	91,552
Liabilities and equity:
Total liabilities	$	61,581	$	58,482
Total joint ventures’ equity	34,052		33,070
Total liabilities and equity	$	95,633	$	91,552

	Three Months Ended March 31,
	2023		2022
Revenue	$	21,214	$	10,079
Gross Profit	2,403		1,609
Earnings	901		323

The table below presents the components of our investment in BOMAY and a summary of the activity within those components for the three months ended March 31, 2023 in U.S. dollars (in thousands):

	Initial Investment at Merger (1), (2)		Undistributed Earnings		Cumulative Foreign Exchange Translation Adj		Investment in BOMAY
Balance at December 31, 2022	$	9,333	$	2,295	$	(22)	$	11,606
Equity in earnings	—		393		—		393
Less: dividend distributions	—		—		—		—
Foreign currency translation gain (loss)	—		—		93		93
Balance at March 31, 2023	$	9,333	$	2,688	$	71	$	12,092

_______________

(1)Accumulated statutory reserves in equity method investments of $2.7 million at March 31, 2023 and December 31, 2022 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 is being accreted over an original period of nine years (the expected life of the joint venture). The Company's accretion during the three months ended March 31, 2023 and 2022 both totaled approximately $32 thousand each, respectively, and is included in income from equity investment in foreign joint venture in the accompanying Condensed Consolidated Statements of Operations. The remaining basis difference, net of accumulated accretion at March 31, 2023 and December 31, 2022 is summarized in the following table (in thousands):

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	March 31, 2023		December 31, 2022
Original basis difference	$	1,165	$	1,165
Less accumulated accretion	(475)		(443)
Net remaining basis difference at end of period	$	690	$	722

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 of our investment in BOMAY is necessary for the period ending March 31, 2023.

8. ACCRUED LIABILITIES

    The Company’s accrued liabilities at March 31, 2023 and December 31, 2022 consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
Compensation and benefits	$	1,709	$	3,111
Professional fees	421		454
LNG fuel and transportation	3,387		6,549
Accrued interest	33		33
Customer deposits and prepayments	1,406		8,456
Other taxes payable	552		701
Other accrued liabilities	3,173		338
Total accrued liabilities	$	10,681	$	19,642

9. DEBT

The Company’s carrying value of debt, net of debt issuance costs at March 31, 2023 and December 31, 2022 consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
Secured term note, net of debt issuance costs	$	8,661	$	8,650
Secured promissory note - related party	1,839		2,435
Insurance and other notes payable	489		848
Less: amounts due within one year	(2,328)		(3,283)
Total long-term debt	$	8,661	$	8,650

Secured Term Note

On April 8, 2021, the Company entered into a loan agreement (the “Loan Agreement”) with AmeriState Bank (“Lender”), to provide for an advancing loan facility in the aggregate principal amount of up to $10.0 million (the “AmeriState Loan”), of which $9.0 million was drawn and outstanding as of March 31, 2023. The AmeriState 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 AmeriState 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 AmeriState Loan. The Loan Agreement is secured by specific equipment owned by the Company.

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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.

The Loan Agreement requires the Company to meet certain financial covenants which include a debt-to-net-worth ratio of not more than 9.1 to 1.0 and a debt service coverage ratio of not less than 1.2 to 1.0 on an annual basis beginning December 31, 2022. The Company was in compliance with all of its debt covenants as of March 31, 2023.

Secured Promissory Note - Related Party

On August 16, 2019, the Company issued a Secured Promissory Note to MG Finance Co., Ltd., a related party, in the principal amount of $5.0 million, which was subsequently amended to defer scheduled debt and interest payments and lower the interest rate from 12.0% to 6.0%. Repayments under the amendment are in equal monthly installments through December 2023. As of March 31, 2023, the outstanding balance is $1.8 million. The debt is secured by certain equipment of the Company. See Note 10 - Related Party Transactions.

Insurance Notes Payable

The Company finances its annual commercial insurance premiums for its business and operations with a finance company. The dollar amount financed was $1.2 million for the policy. The outstanding principal balance on the premium finance note was $0.8 million at December 31, 2022 and $0.5 million at March 31, 2023. The Company makes equal monthly payments of principal and interest over the term of the notes which are generally 10 months or 11 months in term. The interest rate for the insurance policy is 6.31%.

10. RELATED PARTY TRANSACTIONS

Secured Promissory Note - Related Party

Casey Crenshaw is the beneficial owner of 50% of The Modern Group and is deemed to jointly control The Modern Group with family members. The Company has a secured promissory note payable with MG Finance Co., Ltd, a subsidiary of The Modern Group. See additional discussion in Note 9.

Other Purchases and Sales

The Company purchases supplies and services from subsidiaries of The Modern Group. The Company made purchases of supplies and services totaling $0.1 million and $48 thousand for the three months ended March 31, 2023 and 2022, respectively. Office rent of $15 thousand was paid to The Modern Group during both the three months ended March 31, 2023 and 2022. As of March 31, 2023 and December 31, 2022, the Company had $31 thousand and $0.1 million, respectively, due to a subsidiary of The Modern Group included in accounts payable on the Condensed Consolidated Balance Sheets.

Chart E&C beneficially owns 8.0% of our outstanding common stock at March 31, 2023. The Company made no purchases from Chart E&C for the three months ended March 31, 2023 and made purchase from Chart E&C of $45 thousand for the three months ended March 31, 2022. The Company had no receivable due from Chart at March 31, 2023 or December 31, 2022. As of March 31, 2023 the Company had no amounts due to Chart E&C; however does have a commitment for the future delivery of equipment during 2023 totaling $0.6 million. At December 31, 2022, the Company had $0.5 million due to Chart E&C included in accounts payable on the Condensed Consolidated Balance Sheets.

11. 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

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may arise during the course of these audits. It is impossible to determine the ultimate liabilities that the Company may incur 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.

12. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

The Company includes stock compensation expense within general and administrative expenses in the Condensed Consolidated Statements of Operations. During the three months ended March 31, 2023 and 2022, the Company recognized $0.6 million and $0.5 million of stock compensation expense, respectively.

The Company has a long term incentive plan (the “Amended and Restated Plan”) which provides for a maximum number of shares of common stock available for issuance of 4,000,000 shares. Awards under the Amended and Restated Plan may be granted to employees, officers and directors of the Company and affiliates, and any other person who provides services to the Company and its affiliates (including independent contractors and consultants of the Company and its subsidiaries). Awards may be granted in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalents, substitute awards, other stock-based awards, cash awards and/or any combination of the foregoing. No participant may receive a grant covering more than 2,000,000 shares of our common stock in any year and a non-employee member of the Board may not be granted more than 100,000 shares in any year.

Issuances of Common Stock

During the three months ended March 31, 2023, and 2022, shares of common stock were issued upon vesting of restricted stock units of 13,587 and 501,334, respectively. There were no stock options exercised during the three months ended March 31, 2023 or 2022.

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13. NET INCOME (LOSS) PER SHARE

The calculation of net income (loss) per common share including the number of shares for both basic and diluted net income (loss) per share is as follows (in thousands, except share and per share data):

	Three Months Ended March 31,
	2023		2022
Weighted average shares:
Basic weighted average number of common shares outstanding	18,426,408		18,191,446
Dilutive securities (1),(2)	91,509		—
Total shares including dilutive securities	18,517,917		18,191,446
Net income (loss):
Net income (loss) from continuing operations	$	1,084	$	(359)
Loss from discontinued operations, net of income tax	—		(47)
Net income (loss)	$	1,084	$	(406)
Net income (loss) per common share:
Basic income (loss) per common share:
Basic net income (loss) per common share from continuing operations	$	0.06	$	(0.02)
Basic loss per common share from discontinued operations	—		—
Basic net income (loss) per common share	0.06		(0.02)
Diluted income (loss) per common share:
Diluted net income (loss) per common share from continuing operations	$	0.06	$	(0.02)
Diluted loss per common share from discontinued operations	—		—
Diluted net income (loss) per common share	0.06		(0.02)

_______________

(1)Dilutive securities include the dilutive effect of incremental shares for unvested restricted stock units ("RSUs") and unexercised stock options from the Company's stock-based compensation awards. The dilutive RSUs and stock options are calculated under the treasury stock method. For the three months ended March 31, 2023, 2,074,505 of stock options were excluded from dilutive shares because their effect would be anti-dilutive, and 105,843 of RSUs were excluded.

(2)The Company had no dilutive securities for the three months ended March 31, 2022 since the Company incurred net losses for both continuing and discontinued operations for these periods and inclusion would be antidilutive.

14. SUPPLEMENTAL CASH FLOW INFORMATION

The Company's supplemental disclosure of cash flow information for the three months ended March 31, 2023 and 2022 is as follows (in thousands):

	Three Months Ended March 31,
Supplemental Disclosure of Cash Flow Information:	2023		2022
Interest paid	$	182	$	181
Income taxes paid	—		(14)
Significant non-cash investing and financing activities:
Equipment acquired from issuance of note payable	—		359
Acquisition of fixed assets included within accounts payable and accrued expenses	3,000		170

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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 Condensed Consolidated Financial Statements and notes thereto included elsewhere in this Form 10-Q ("this Report") and the consolidated financial statements included in the 2022 Annual Report on Form 10-K filed on March 9, 2023 with the U.S. Securities and Exchange Commission (the "SEC"). 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 Solutions, Inc. and its subsidiaries is an energy transition company that provides turnkey clean energy production, storage, transportation and fueling solutions primarily using liquefied natural gas (“LNG”) to multiple end markets. We provide LNG solutions to customers in diverse end markets, including aerospace, agriculture, energy, industrial, marine bunkering, mining, pipeline, remote power and utility markets. LNG can be used to deliver natural gas to locations where pipeline service is unavailable, has been interrupted, or needs to be supplemented. LNG can also be used to replace a variety alternative fuels, including distillate fuel oil and propane, among others, to provide environmental and economic benefits. Increasingly, LNG is being utilized as a transportation fuel in the marine industry and as a propellant in the private rocket launch sector. We believe that these fuel markets are large and provide significant opportunities for LNG usage.

We believe that LNG as well as other clean energy solutions will provide an important balance between environmental sustainability, security and accessibility, and economic viability when compared to both renewables and other traditional hydrocarbon-based fuels and will play a key role in the energy transition.

The Company generates revenue by selling and delivering LNG to our customers, 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. 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.

LNG Production and Sales—Stabilis builds and operates cryogenic natural gas processing facilities, called “liquefiers,” which convert natural gas into LNG through a purification and multiple stage cooling process. We currently own and operate a liquefier that can produce up to 100,000 LNG gallons per day in George West, Texas and a liquefier that can produce up to 30,000 LNG gallons per day in Port Allen, Louisiana. We also purchase LNG from third-party production sources which allows us to support customers in markets where we do not own liquefiers. We make the determination of LNG and transportation supply sources based on the cost of LNG, the transportation cost to deliver to regional customer locations, and the reliability of the supply source.

Transportation and Logistics Services—Stabilis offers our customers a “virtual natural gas pipeline” by providing turnkey LNG transportation and logistics services in North America. We deliver LNG to our customers’ work sites from both our own production facilities and our network of third-party production sources located throughout North America. We own a fleet of cryogenic trailers to transport and deliver LNG. We also outsource similar equipment and transportation services from qualified third-party providers as required to support our customer base.

Cryogenic Equipment Rental—Stabilis operates a fleet of 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 operations.

Engineering and Field Support Services—Stabilis has experience in the safe, cost effective, and reliable use of LNG in multiple customer applications. We have also developed many processes and procedures that we believe improve our customers’ use of LNG in their operations. Our engineers help our customers design and integrate LNG into their operations and our field service technicians help our customers mobilize, commission and reliably operate on the job site.

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Results of Operations

Stabilis 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 sale of the Brazil Operations represents all of the revenues and expenses previously reported within the Company's Power Delivery segment with the exception of the Company's equity method investment in BOMAY. Further, the Company also believes that the decision to exit the Brazil Operations met the criteria to be reported as discontinued operations. As a result, the Company believes that it has one reporting segment and the operating results presented in the tables below have been recast to separately present the revenues and expenses related to the Brazil Operations as discontinued operations for all periods presented.

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

The comparative tables below reflect our consolidated operating results for the three months ended March 31, 2023 (the “Current Quarter”) as compared to the three months ended March 31, 2022 (the “Prior Year Quarter”) (unaudited, amounts in thousands, except for percentages).

	Three Months Ended March 31,				$ Change		% Change
	2023		2022
Revenues:
Revenues	$	26,842	$	20,267	$	6,575	32.4	%
Operating expenses:
Cost of revenues	20,270		15,504		4,766		30.7
Change in unrealized loss on natural gas derivatives	169		—		169		n/a
Selling, general and administrative expenses	3,379		2,931		448		15.3
Gain from disposal of fixed assets	—		(80)		80		n/a
Depreciation expense	2,011		2,277		(266)		(11.7)
Total operating expenses	25,829		20,632		5,197		25.2
Income (loss) from operations before equity income	1,013		(365)		1,378		377.5
Net equity income from foreign joint venture operations	345		87		258		296.6
Income (loss) from operations	1,358		(278)		1,636		588.5
Other income (expense):
Interest expense, net	(150)		(137)		(13)		(9.5)
Interest expense, net - related parties	(32)		(31)		(1)		(3.2)
Other income (expense)	(84)		(45)		(39)		(86.7)
Total other income (expense)	(266)		(213)		(53)		(24.9)
Net income (loss) from continuing operations before income tax benefit (expense)	1,092		(491)		1,583		322.4
Income tax benefit (expense)	(8)		132		(140)		(106.1)
Net income (loss) from continuing operations	1,084		(359)		1,443		401.9
Loss from discontinued operations, net of income tax	—		(47)		47		n/a
Net income (loss)	$	1,084	$	(406)	$	1,490	367.0

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Revenues

During the Current Quarter, revenues increased $6.6 million, or 32%, compared to the Prior Year Quarter. The increase in revenue primarily related to:

•Increased natural gas prices during the Current Quarter compared to the Prior Year Quarter;

•Increased pricing charged to our customers;

•Increased revenues from minimum purchase contracts ("take-or-pay"); and

•Increases in rental, service, and other revenue related to additional projects with higher equipment and labor components.

The above increases were partially offset by fewer gallons of LNG delivered in the Current Quarter compared to the Prior Year Quarter.

Operating Expenses

Costs of revenues. Cost of revenues increased $4.8 million, or 31%, compared to the Prior Year Quarter. As a percentage of revenue, these costs were 76% in both the Current Quarter and the Prior Year Quarter. The increase in cost of revenues was attributable to:

•Increased natural gas prices during the Current Quarter compared to the Prior Year Quarter;

•Inflationary pressures, including increased transportation, liquefaction, personnel and other costs;

•Increased take-or-pay fees; and

•Increased costs of rental, service, and other revenue primarily related to increased labor and equipment rentals to support marine bunkering projects.

Change in unrealized loss on natural gas derivatives. The Company incurred an unrealized loss of $0.2 million in the Current Quarter on its natural gas derivatives. The unrealized loss was due to lower future natural gas prices at March 31, 2023 as compared to December 31, 2022. The Company had no derivatives in the Prior Year Quarter. See also Note 4 in the Notes to the Condensed Consolidated Financial Statements for a further discussion of our derivatives.

Selling, general and administrative expenses. Selling, general and administrative expense increased $0.4 million, during the Current Quarter compared to the Prior Year Quarter. The increase was primarily related to increased compensation and headcount expense and increased professional services.

Gain from disposal of fixed assets. In the Prior Year Quarter, a gain of $0.1 million was recognized from the disposal of fixed assets. There was no gain in the Current Year Quarter.

Depreciation. Depreciation expense decreased 12% during the Current Quarter as compared to the Prior Year Quarter due to assets reaching the end of their depreciable lives.

Net equity income from foreign joint venture operations. Income from investments in the Company's foreign joint venture increased $0.3 million during the Current Quarter due to increased operating activity in China.

Interest expense, net. Interest expense increased $13 thousand during the Current Quarter as compared to the Prior Year Quarter primarily related to interest on additional borrowings from the Company's loan with AmeriState Bank.

Interest expense, net - related parties. Related party interest expense in the Current Quarter was comparable to the Prior Year.

Other income (expense). Other expense was $84 thousand during the Current Quarter compared to other income of $45 thousand in the Prior Year Quarter related to transactional foreign exchange losses.

Income tax expense. The Company incurred a state and foreign income tax expense of $8 thousand during the Current Quarter compared to a state and foreign income tax benefit of $0.1 million during the Prior Year Quarter. No U.S. federal income tax benefit was recorded for the Current Quarter or Prior Year Quarter as any net U.S. deferred tax assets generated from operating losses were offset by a change in the Company's valuation allowance on net deferred tax assets.

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Discontinued Operations. Operating loss from discontinued operations, net of tax was $47 thousand for the Prior Year Quarter. The Company sold its Brazil Operations on October 31, 2022. There was no activity from discontinued operations during the Current Quarter. See Note 2 in the Notes to Condensed Consolidated Financial Statements for further discussion of the Company's discontinued operations.

Liquidity and Capital Resources

Historically, our principal sources of liquidity have consisted of cash on hand, cash provided by our operations, proceeds received from borrowings under the AmeriState Loan and distributions received from our BOMAY joint venture. In prior years, the Company also obtained financing from MG Finance, a related party. During the Current Quarter, our principal source of liquidity was our existing cash balances and cash provided by operations. We have used cash flows to invest in fixed assets and increase working capital to support growth as well as to pay interest and principal amounts outstanding under our debt. The Company's sale of the Brazil Operations on October 31, 2022 is not anticipated to adversely impact the Company's future cash flows.

As of March 31, 2023, we had $6.9 million in cash and cash equivalents on hand and $11.3 million in outstanding debt (net of debt issuance costs) and lease obligations (of which $2.5 million is due in the next twelve months). The Company has a $10.0 million loan facility with $1.0 million available for future draws at March 31, 2023. The Company has also filed a shelf registration statement (described below) which provides the Company the flexibility to raise capital to fund working capital requirements, repay debt and/or fund future transactions.

The Company is subject to substantial business risks and uncertainties inherent in the LNG industry and 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. Management believes the business will generate sufficient cash flows from its operations along with availability under our loan facility that is sufficient to fund the business for the next twelve months. As we continue to grow, management continues to evaluate additional financing alternatives, however, there is no guarantee that additional financing will be available or available at terms that would be beneficial to shareholders.

Cash Flows

Cash flows provided by (used in) our operating, investing and financing activities are summarized below (unaudited, in thousands):

	Three Months Ended March 31,
	2023		2022
Net cash provided by (used in):
Operating activities	$	93	$	3,155
Investing activities	(3,727)		(818)
Financing activities	(961)		(1,132)
Effect of exchange rate changes on cash	5		(3)
Net increase (decrease) in cash and cash equivalents	$	(4,590)	$	1,202
Cash and cash equivalents, beginning of period	11,451		910
Cash and cash equivalents, end of period	$	6,861	$	2,112

Operating Activities

Net cash provided by operating activities totaled $0.1 million for the three months ended March 31, 2023 compared to $3.2 million for the same period in 2022. The decrease in net cash provided by operating activities of $3.1 million as compared to the Prior Year Quarter was primarily attributable to higher net working capital requirements.

Investing Activities

Net cash used in investing activities totaled $3.7 million for the three months ended March 31, 2023 compared to $0.8 million for the three months ended March 31, 2022. The increase in net cash used in the Current Quarter was primarily due to cash paid to purchase additional assets.

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Financing Activities

Net cash used in financing activities totaled $1.0 million for the three months ended March 31, 2023, compared to $1.1 million for the three months ended March 31, 2022. For both periods, the cash used was for repayment of debt.

Future Cash Requirements

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 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, obtaining new 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.

Capital expenditures for the three months ended March 31, 2023 were $3.7 million and primarily related to the purchase of additional liquefaction assets and rolling stock. The Company had purchase orders open of approximately $4.0 million for capital expenditures at March 31, 2023. Future capital expenditures over the next twelve months will be dependent upon investment opportunities as well as the availability of additional capital at favorable terms.

Shelf Registration Statement

On April 11, 2022, the Company filed a registration statement on Form S-3 (the "Shelf Registration") which was declared effective on April 26, 2022 and will permit the Company to issue up to $100.0 million in either common stock, preferred stock, warrants or a combination of the above, and gives the Company the flexibility to raise capital to fund working capital requirements, repay debt and/or fund future transactions. On December 16, 2022, the Company filed a prospectus supplement to the Shelf Registration that allows the Company to sell and issue shares of common stock directly to the public "at the market" as permitted in Rule 415 under the Securities Act. As a smaller reporting company, we are subject to General Instruction I.B.6 of Form S-3, which limits the amounts that we may sell under the Shelf Registration to no more than one-third of our public float in any twelve month period as measured in accordance with such instruction. There is no assurance that we will be able to raise capital pursuant to the Shelf Registration on acceptable terms or at all. We made no issuances under the Shelf Registration during the three months ended March 31, 2023.

Off-Balance Sheet Arrangements

As of March 31, 2023, 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.

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 accounting principles generally accepted in the United States of America ("U.S. GAAP") which 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.

There have been no significant changes in the Company's "Critical Accounting Policies and Estimates" during the three months ended March 31, 2023 from those disclosed within the Company's Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the SEC on March 9, 2023.

New Accounting Standards

See Note 1 to the Notes to Condensed Consolidated Financial Statements included elsewhere in this Report for information on new accounting standards.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a “smaller reporting company,” the Company is not required to provide this information.

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 March 31, 2023.

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.

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, 2022 filed with the SEC on March 9, 2023 (“Form 10-K”), which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common stock. During the three months ended March 31, 2023, there have been no material changes in our risk factors disclosed in our 2022 Form 10-K.

ITEM 5. OTHER INFORMATION.

None.

24

ITEM 6. EXHIBITS.

(a) Index to Exhibits

Exhibit No.	Exhibit Description
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	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)
4.2	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)
4.3	Registration Rights Agreement, dated June 1, 2021, among TGB Equipment Leasing, LLC and Stabilis (Incorporated by reference to Exhibit 10.5 to Registrant's Quarterly Report on Form 10-Q filed on August 5, 2021)
4.5	Description of Securities (incorporated by reference to Exhibit 4.5 to Registrant's Annual Report on Form 10-K filed March 10, 2022)
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.
32.1	*Section 1350 Certifications of Principal Executive Officer and Principal Financial Officer.
101	* Interactive XBRL Instance Document (XBRL tags are embedded within the Inline XBRL document)
104	* Cover Page Interactive Data File (formatted as XBRL and contained in Exhibit 101).

*    Filed herewith.

25

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: May 10, 2023
STABILIS SOLUTIONS, INC.
By:	/s/ Westervelt T. Ballard, Jr.
	Westervelt T. Ballard, Jr.
	President and Chief Executive Officer (Principal Executive Officer)
By:	/s/ Andrew L. Puhala
	Andrew L. Puhala
	Chief Financial Officer (Principal Financial Officer)

26

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Westervelt T. Ballard, Jr., certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q of Stabilis Solutions, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and l5d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.    The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	May 10, 2023
By:	/s/ Westervelt T. Ballard, Jr.
	Westervelt T. Ballard, Jr. Principal Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Andrew L. Puhala, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q of Stabilis Solutions, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and l5d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 10, 2023
By:	/s/ Andrew L. Puhala
	Andrew L. Puhala Principal Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Westervelt T. Ballard, Jr., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Stabilis Solutions, Inc. on Form 10-Q for the quarter ended March 31, 2023 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of Stabilis Solutions, Inc.

Date:	May 10, 2023
By:	/s/ Westervelt T. Ballard, Jr.
	Westervelt T. Ballard, Jr. Principal Executive Officer

I, Andrew L. Puhala, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Stabilis Solutions, Inc. on Form 10-Q for the quarter ended March 31, 2023 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Form l0-Q fairly presents in all material respects the financial condition and results of operations of Stabilis Solutions, Inc.

Date:	May 10, 2023
By:	/s/ Andrew L. Puhala
	Andrew L. Puhala Principal Financial Officer

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2023	May 10, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	001-40364
Entity Registrant Name	STABILIS SOLUTIONS, INC.
Entity Incorporation, State or Country Code	FL
Entity Tax Identification Number	59-3410234
Entity Address, Address Line One	11750 Katy Freeway
Entity Address, Address Line Two	Suite 900
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77079
City Area Code	832
Local Phone Number	456-6500
Title of 12(b) Security	Common Stock, $.001 par value
Trading Symbol	SLNG
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		18,478,829
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Entity Central Index Key	0001043186
Current Fiscal Year End Date	--12-31

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 6,861	$ 11,451
Accounts receivable, net	9,696	16,326
Inventories, net	70	205
Prepaid expenses and other current assets	1,402	2,186
Assets held for sale	0	2,049
Total current assets	18,029	32,217
Property, plant and equipment:
Cost	109,651	103,368
Less accumulated depreciation	(57,722)	(55,699)
Property, plant and equipment, net	51,929	47,669
Goodwill	4,314	4,314
Investments in foreign joint ventures	12,092	11,606
Right-of-use assets and other noncurrent assets	563	774
Total assets	86,927	96,580
Current liabilities:
Accounts payable	3,173	4,474
Accrued liabilities	10,681	19,642
Current portion of long-term notes payable	489	848
Current portion of long-term notes payable - related parties	1,839	2,435
Current portion of finance and operating lease obligations	156	133
Total current liabilities	16,338	27,532
Long-term notes payable, net of current portion and debt issuance costs	8,661	8,650
Long-term portion of finance and operating lease obligations	112	183
Other noncurrent liabilities	89	348
Total liabilities	25,200	36,713
Commitments and contingencies (Note 11)
Stockholders’ Equity:
Preferred stock; $0.001 par value, 1,000,000 shares authorized, no shares issued and outstanding at March 31, 2023 and December 31, 2022	0	0
Common stock; $0.001 par value, 37,500,000 shares authorized, 18,433,654 and 18,420,067 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	19	19
Additional paid-in capital	100,726	100,137
Accumulated other comprehensive income	269	82
Accumulated deficit	(39,287)	(40,371)
Total stockholders’ equity	61,727	59,867
Total liabilities and stockholders’ equity	$ 86,927	$ 96,580

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value (in usd per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in usd per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	37,500,000	37,500,000
Common stock, shares issued (in shares)	18,433,654	18,420,067
Common stock, shares, outstanding (in shares)	18,433,654	18,420,067

XML

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenues:
Revenues	$ 26,842	$ 20,267
Operating expenses:
Cost of revenues	20,270	15,504
Change in unrealized loss on natural gas derivatives	169	0
Selling, general and administrative expenses	3,379	2,931
Gain from disposal of fixed assets	0	(80)
Depreciation expense	2,011	2,277
Total operating expenses	25,829	20,632
Income (loss) from operations before equity income	1,013	(365)
Net equity income from foreign joint venture operations:
Income from equity investment in foreign joint venture	393	161
Foreign joint venture operating related expenses	(48)	(74)
Net equity income from foreign joint venture operations	345	87
Income (loss) from operations	1,358	(278)
Other income (expense):
Interest expense, net	(150)	(137)
Interest expense, net - related parties	(32)	(31)
Other income (expense), net	(84)	(45)
Total other income (expense)	(266)	(213)
Net income (loss) from continuing operations before income tax benefit (expense)	1,092	(491)
Income tax benefit (expense)	(8)	132
Net income (loss) from continuing operations	1,084	(359)
Loss from discontinued operations, net of income tax	0	(47)
Net income (loss)	$ 1,084	$ (406)
Net income (loss) per common share (Note 13):
Basic net income (loss) per common share from continuing operations (in usd per share)	$ 0.06	$ (0.02)
Basic loss per common share from discontinued operations (in usd per share)	0	0
Basic net income (loss) per common share (in usd per share)	0.06	(0.02)
Diluted net income (loss) per common share from continuing operations (in usd per share)	0.06	(0.02)
Diluted loss per common share from discontinued operations (in usd per share)	0	0
Diluted net income (loss) per common share (in usd per share)	$ 0.06	$ (0.02)

XML

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 1,084	$ (406)
Foreign currency translation adjustment, net of tax	187	377
Total comprehensive income (loss)	$ 1,271	$ (29)

XML

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income	Accumulated Deficit
Balance, beginning (in shares) at Dec. 31, 2021		17,691,268
Balance, beginning at Dec. 31, 2021	$ 61,059	$ 18	$ 97,875	$ 351	$ (37,185)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued from vesting of stock-based awards (in shares)		501,334
Common stock issued from vesting of stock-based awards	0
Stock-based compensation	531		531
Net income (loss)	(406)				(406)
Other comprehensive income, net of tax	377			377
Balance, ending (in shares) at Mar. 31, 2022		18,192,602
Balance, ending at Mar. 31, 2022	61,561	$ 18	98,406	728	(37,591)
Balance, beginning (in shares) at Dec. 31, 2022		18,420,067
Balance, beginning at Dec. 31, 2022	59,867	$ 19	100,137	82	(40,371)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued from vesting of stock-based awards (in shares)		13,587
Common stock issued from vesting of stock-based awards	0
Stock-based compensation	589		589
Net income (loss)	1,084				1,084
Other comprehensive income, net of tax	187			187
Balance, ending (in shares) at Mar. 31, 2023		18,433,654
Balance, ending at Mar. 31, 2023	$ 61,727	$ 19	$ 100,726	$ 269	$ (39,287)

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities:
Net income (loss) from continuing operations	$ 1,084	$ (359)
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by operating activities:
Depreciation	2,011	2,277
Stock-based compensation expense	589	531
Income from equity investment in joint venture	(393)	(161)
Realized and unrealized losses on natural gas derivatives	421	0
Changes in operating assets and liabilities:
Accounts receivable	2,044	1,672
Prepaid expenses and other current assets	507	342
Accounts payable and accrued liabilities	(6,361)	(1,684)
Other	191	(156)
Net cash provided by operating activities from continuing operations	93	2,462
Net cash provided by operating activities from discontinued operations	0	693
Net cash provided by operating activities	93	3,155
Cash flows from investing activities:
Acquisition of fixed assets	(3,727)	(690)
Proceeds from sale of fixed assets	0	100
Net cash used in investing activities from continuing operations	(3,727)	(590)
Net cash used in investing activities from discontinued operations	0	(228)
Net cash used in investing activities	(3,727)	(818)
Cash flows from financing activities:
Payments on short- and long-term notes payable	(365)	(414)
Payments on notes payable and finance leases from related parties	(596)	(669)
Net cash used in financing activities from continuing operations	(961)	(1,083)
Net cash used in financing activities from discontinued operations	0	(49)
Net cash used in financing activities	(961)	(1,132)
Effect of exchange rate changes on cash	5	(3)
Net increase (decrease) in cash and cash equivalents	(4,590)	1,202
Cash and cash equivalents, beginning of period	11,451	910
Cash and cash equivalents, end of period	$ 6,861	$ 2,112

XML

Description of Business and Basis of Presentation

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Description of Business and Basis of Presentation

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business

Stabilis Solutions, Inc. and its subsidiaries (the “Company”, “Stabilis”, “our”, “us” or “we”) is an energy transition company that provides turnkey clean energy production, storage, transportation and fueling solutions primarily using liquefied natural gas (“LNG”) to multiple end markets.

The Company serves customers in diverse end markets, including aerospace, agriculture, energy, industrial, marine bunkering, mining, pipeline, remote power and utility markets. LNG can be used to deliver natural gas to locations where pipeline service is unavailable, has been interrupted, or needs to be supplemented. Additionally, LNG can be used as a partner fuel for renewable energy, and as an alternative to traditional fuel sources, such as distillate fuel oil (including diesel fuel and other fuel oils) and propane, among others to provide both environmental and economic benefits.

The Company also builds power and control systems for the energy industry in China through its 40% owned Chinese joint venture, BOMAY Electric Industries, Inc (“BOMAY”). BOMAY is accounted for as an equity investment.

Basis of Presentation and Consolidation

The accompanying unaudited, interim condensed consolidated financial statements ("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 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 prevent the information presented herein from being misleading. The 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 periods presented are not necessarily indicative of the results of operations to be expected for the full year. The accompanying Condensed Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2022 included in the Company's Annual Report on Form 10-K, as filed on March 9, 2023.

All intercompany accounts and transactions have been eliminated in consolidation. In the Notes to Condensed Consolidated Financial Statements, all dollar amounts in tabulations are in thousands, unless otherwise indicated.

The Company believes that the Brazil Operations sold on October 31, 2022, met the criteria for discontinued operations presentation. The classification of these assets, liabilities, results of operations and cash flows as discontinued operations requires retrospective application to financial information for all prior periods presented. Accordingly, the operating results and cash flows for the three months ended March 31, 2022, have been recast on our Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows, respectively. There were no assets and liabilities from discontinued operations as of March 31, 2023 or December 31, 2022, and no results of operations or cash flows for the three months ended March 31, 2023. Unless otherwise noted, the amounts presented throughout the notes to our Financial Statements relate to our continuing operations. See Note 2 for further discussion of the Company's discontinued operations.

Use of Estimates in the Preparation of the Consolidated Financial Statements

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 fair value of natural gas derivatives, 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.

Derivative instruments

The Company had certain natural gas derivative instruments as of March 31, 2023 and December 31, 2022. The Company recognizes all of its derivative instruments as either assets or liabilities which are recorded at fair value on its Condensed Consolidated Balance Sheet. The accounting for changes in the fair value of a derivative instrument depends on whether it qualifies for and has been designated as a hedge as well as the type of hedge. The Company has not designated its derivatives as hedges under U.S. GAAP and all resulting gains and losses from changes in the fair value of its derivative instruments are included within the Condensed Consolidated Statements of Operations. The Company did not enter into any derivative transactions for speculative purposes. See Note 4 for further discussion of the Company's derivatives.

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses - Measurement of Credit Losses on Financial Instruments,” which changes the way companies evaluate credit losses for most financial assets and certain other instruments. For receivables, and other short-term financial instruments, companies will be required to use a new forward-looking “expected loss” model to evaluate impairment, potentially resulting in earlier recognition of allowances for losses. The new standard also requires enhanced disclosures, including the requirement to disclose the information used to track credit quality by year of origination. ASU No. 2016-13 was effective for the Company in the first quarter 2023. Adoption of this standard had no material impact to the Company's Condensed Consolidated Financial Statements.

XML

Discontinued Operations

3 Months Ended

Mar. 31, 2023

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

DISCONTINUED OPERATIONS

On October 31, 2022, the Company entered into a sales agreement and closed on the sale of its Brazil Operations. The Company believes that the sale of the Brazil Operations met the criteria for discontinued operations presentation, as the sale of the Brazil Operations represented a strategic shift of future operations of the Company. Further, the Brazil Operations had separately reported financial information available, as the Brazil Operations represented substantially all of the revenue and expenses of the Company's previously reported Power Delivery segment.

The classification of these assets, liabilities, results of operations and cash flows as discontinued operations requires retrospective application to financial information for all prior periods presented. Accordingly, for the 2022 periods, preceding the sale, the Condensed Consolidated Financial Statements and related notes have been recast to separately state the revenues and expenses and cash flows between its continuing operations and the discontinued operations. The Company had no assets and liabilities related to the Brazil Operations at March 31, 2023 or December 31, 2022. In addition, the Company had no results of operations nor cash flows for the three months ended March 31, 2023.

The following table summarizes the components of income from discontinued operations for the periods presented (in thousands):

	Three Months Ended March 31,
	2023		2022
Revenue	$	—	$	2,766
Costs and expenses	—		2,793
Other income (expense), net	—		(17)
Loss from discontinued operations before income taxes	$	—	$	(44)
Income tax expense	—		3
Loss from discontinued operations, net of income taxes	$	—	$	(47)

Segment Reporting

As a result of the classification of the Brazil Operations as discontinued operations, the Company believes that it only has one reporting segment.

XML

Revenue Recognition

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue Recognition

REVENUE RECOGNITION

We recognize revenues when the transfer of promised goods or services are delivered to our customers in accordance with the applicable customer contract and we are entitled to be paid by the customer. Revenues are measured as consideration specified in the contract and exclude any sales incentives and amounts collected on behalf of third parties. Amounts are billed upon completion of service or transfer of a product and are generally due within 30 days. Revenues from contracts with customers are disaggregated into (1) LNG product (2) rental (3) service and (4) other.

LNG product revenue generated includes the revenue from the production and delivery of LNG to our customer’s location. Product contracts are established by agreeing on a sales price or transaction price for the related item. 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. The Company acts as a principal when using third party transportation companies and therefore recognizes the gross revenue for the delivery of LNG. The Company enters into forward sales contracts for the delivery of LNG to its customers. Certain of these sales contracts contain provisions that may meet the criteria of a derivative in the event delivery is not made. These contracts are accounted for under the normal purchase normal sales exclusion under U.S. GAAP and are not measured at fair value each reporting period.

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 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. Revenues related to rental of equipment are recognized under Topic 606 and not ASC 842: Leases, as 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. 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. 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.

Variable and Other Revenue Components

Certain of our contracts may include rental or services that may vary upon the customer demands at stated rates within the contract and are satisfied as the work is authorized by the customer and performed by the Company. LNG product sales agreements may include both fixed and variable fees per gallon of LNG, but is representative of the stand-alone selling price for LNG at the time the contract was negotiated. We have concluded that the variable LNG fees meet the exception for allocating variable consideration to specific parts of the contract. As such, the variable consideration for these contracts is allocated to each distinct gallon of LNG and recognized when that distinct gallon of LNG is delivered to the customer.

Taxes assessed by a governmental authority that are directly imposed on revenue-producing transactions between the Company and its customers, such as sales, use and value-added taxes, are excluded from revenue.

Disclosure: Disaggregated Revenues

The table below presents revenue disaggregated by source, for the three months ended March 31, 2023 and 2022 (in thousands):

	Three Months Ended March 31,
Revenues:	2023		2022
LNG Product	$	21,905	$	16,785
Rental	2,247		1,986
Service	2,066		1,395
Other	624		101
Total revenues	$	26,842	$	20,267

The table below presents revenue disaggregated by geographic location, for the three months ended March 31, 2023 and 2022 (in thousands):

	Three Months Ended March 31,
Revenues:	2023		2022
Mexico	$	2,819	$	3,766
United States	24,023		16,501
Total revenues	$	26,842	$	20,267

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Derivative Instruments

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

DERIVATIVE INSTRUMENTS

As of March 31, 2023 and December 31, 2022, the Company held a series of call options (“the Call Options”) for the purchase of natural gas related to customer commitments. The Call Options are for a total of 1.1 million MMBtu (million British thermal units) of natural gas at March 31, 2023 which extend into the second quarter of 2024. The Company purchased the Call Options to manage the risk of increasing natural gas prices above what it can charge its customers. The Company may also enter into other derivative transactions when beneficial. Except for contracts qualifying for the normal purchase normal sales exception, as further described below, the Company recognizes all of its derivative instruments as either assets or liabilities which are recorded at fair value on its Condensed Consolidated Balance Sheet. The fair value of the Call Options are predominantly determined from broker quotes and are considered a level 2 fair value measurement. The following table presents the location and fair value of the Call Options at March 31, 2022 and December 31, 2022 on the Company's Condensed Consolidated Balance Sheets (in thousands):

Location on Condensed Consolidated Balance Sheet	March 31, 2023(1)		December 31, 2022(1)
Prepaid expenses and other current assets (2)	$	138	$	347
Right-of-use assets and other noncurrent assets (2)	13		225
	$	151	$	572

_______________

(1)    Amounts are presented on a gross basis.

(2)    The classification between current and noncurrent assets is based upon when the Call Options mature.

The Company has not designated the Call Options as a hedge under U.S. GAAP and all resulting gains and losses from changes in the fair value of its derivative instruments are included within change in unrealized loss on natural gas derivatives within the Company's Condensed Consolidated Statements of Operations. The table below presents the changes in the fair value of the Call Options for the three and three months ended March 31, 2023 as well as their net realized gains and losses.

	Three Months Ended March 31,
Changes in fair value of derivatives	2023		2022(1)
Fair value of natural gas derivatives, beginning of period	$	572	$	—
Unrealized gains (losses) transferred to realized gains (losses), net (3)	(252)		—
Change in unrealized loss on natural gas derivatives (2)	(169)		—
Fair value of natural gas derivatives, end of period	$	151	$	—
	Three Months Ended March 31,
Realized gain (loss) from derivative instruments	2023		2022(1)
Unrealized gains (losses) transferred to realized gains (losses), net	$	(252)	$	—
Derivative settlement payments received (3)	—		—
Realized gain (loss) from natural gas derivatives, net (3)	$	(252)	$	—

_______________

(1)    The Company did not have any derivative instruments during the three months ended March 31, 2022.

(2)    Amounts are presented as their own separate line item within the Company's Condensed Consolidated Statements of Operations.

(3)    Amounts are included within cost of LNG product on the Company's Condensed Consolidated Statements of Operations.

The Company also enters into forward contracts for purchases of natural gas and/or electricity to meet liquefaction requirements and forward sales contracts for the delivery of LNG to its customers. These contracts are not accounted for as derivatives, but accounted for under the normal purchase normal sales exclusion under U.S. GAAP and are not measured at fair value each reporting period.

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Prepaid Expenses and Other Current Assets

3 Months Ended

Mar. 31, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid Expenses and Other Current Assets

PREPAID EXPENSES AND OTHER CURRENT ASSETS

The Company’s prepaid expenses and other current assets at March 31, 2023 and December 31, 2022 consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
Prepaid insurance	$	712	$	990
Prepaid supplier expenses	232		286
Other receivables	103		254
Natural gas derivatives at fair value, current	138		347
Deposits	203		236
Other	14		73
Total prepaid expenses and other current assets	$	1,402	$	2,186

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Property, Plant and Equipment

3 Months Ended

Mar. 31, 2023

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

PROPERTY, PLANT AND EQUIPMENT

The Company’s property, plant and equipment at March 31, 2023 and December 31, 2022 consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
Liquefaction plants and systems	$	47,645	$	47,636
Real property and buildings	2,065		2,057
Vehicles and tanker trailers and equipment	52,936		52,647
Computer and office equipment	459		470
Construction in progress	6,516		527
Leasehold improvements	30		31
	109,651		103,368
Less: accumulated depreciation	(57,722)		(55,699)
	$	51,929	$	47,669

Depreciation expense totaled $2.0 million and $2.3 million for the three months ended March 31, 2023 and 2022, respectively, all of which is included in the Condensed Consolidated Statements of Operations as a separate line item.

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Investments in Foreign Joint Ventures

3 Months Ended

Mar. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

Investments in Foreign Joint Ventures

INVESTMENT IN FOREIGN JOINT VENTURE The Company holds a 40% interest in BOMAY, which builds electrical systems. 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 during the three months ended March 31, 2023 and 2022.

The tables below present a summary of BOMAY's assets and liabilities and equity at March 31, 2023 and December 31, 2022, and its operational results for the three months ended March 31, 2023 and 2022 in U.S. dollars (in thousands):

	March 31, 2023		December 31, 2022
Assets:
Total current assets	$	92,669	$	88,536
Total non-current assets	2,964		3,016
Total assets	$	95,633	$	91,552
Liabilities and equity:
Total liabilities	$	61,581	$	58,482
Total joint ventures’ equity	34,052		33,070
Total liabilities and equity	$	95,633	$	91,552

	Three Months Ended March 31,
	2023		2022
Revenue	$	21,214	$	10,079
Gross Profit	2,403		1,609
Earnings	901		323

The table below presents the components of our investment in BOMAY and a summary of the activity within those components for the three months ended March 31, 2023 in U.S. dollars (in thousands):

	Initial Investment at Merger (1), (2)		Undistributed Earnings		Cumulative Foreign Exchange Translation Adj		Investment in BOMAY
Balance at December 31, 2022	$	9,333	$	2,295	$	(22)	$	11,606
Equity in earnings	—		393		—		393
Less: dividend distributions	—		—		—		—
Foreign currency translation gain (loss)	—		—		93		93
Balance at March 31, 2023	$	9,333	$	2,688	$	71	$	12,092

_______________

(1)Accumulated statutory reserves in equity method investments of $2.7 million at March 31, 2023 and December 31, 2022 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 is being accreted over an original period of nine years (the expected life of the joint venture). The Company's accretion during the three months ended March 31, 2023 and 2022 both totaled approximately $32 thousand each, respectively, and is included in income from equity investment in foreign joint venture in the accompanying Condensed Consolidated Statements of Operations. The remaining basis difference, net of accumulated accretion at March 31, 2023 and December 31, 2022 is summarized in the following table (in thousands):

	March 31, 2023		December 31, 2022
Original basis difference	$	1,165	$	1,165
Less accumulated accretion	(475)		(443)
Net remaining basis difference at end of period	$	690	$	722

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 of our investment in BOMAY is necessary for the period ending March 31, 2023.

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Accrued Liabilities

3 Months Ended

Mar. 31, 2023

Payables and Accruals [Abstract]

Accrued Liabilities

ACCRUED LIABILITIES

    The Company’s accrued liabilities at March 31, 2023 and December 31, 2022 consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
Compensation and benefits	$	1,709	$	3,111
Professional fees	421		454
LNG fuel and transportation	3,387		6,549
Accrued interest	33		33
Customer deposits and prepayments	1,406		8,456
Other taxes payable	552		701
Other accrued liabilities	3,173		338
Total accrued liabilities	$	10,681	$	19,642

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Debt

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Debt

DEBT

The Company’s carrying value of debt, net of debt issuance costs at March 31, 2023 and December 31, 2022 consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
Secured term note, net of debt issuance costs	$	8,661	$	8,650
Secured promissory note - related party	1,839		2,435
Insurance and other notes payable	489		848
Less: amounts due within one year	(2,328)		(3,283)
Total long-term debt	$	8,661	$	8,650

Secured Term Note

On April 8, 2021, the Company entered into a loan agreement (the “Loan Agreement”) with AmeriState Bank (“Lender”), to provide for an advancing loan facility in the aggregate principal amount of up to $10.0 million (the “AmeriState Loan”), of which $9.0 million was drawn and outstanding as of March 31, 2023. The AmeriState 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 AmeriState 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 AmeriState Loan. The Loan Agreement is secured by specific equipment owned by the Company.

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.

The Loan Agreement requires the Company to meet certain financial covenants which include a debt-to-net-worth ratio of not more than 9.1 to 1.0 and a debt service coverage ratio of not less than 1.2 to 1.0 on an annual basis beginning December 31, 2022. The Company was in compliance with all of its debt covenants as of March 31, 2023.

Secured Promissory Note - Related Party

On August 16, 2019, the Company issued a Secured Promissory Note to MG Finance Co., Ltd., a related party, in the principal amount of $5.0 million, which was subsequently amended to defer scheduled debt and interest payments and lower the interest rate from 12.0% to 6.0%. Repayments under the amendment are in equal monthly installments through December 2023. As of March 31, 2023, the outstanding balance is $1.8 million. The debt is secured by certain equipment of the Company. See Note 10 - Related Party Transactions.

Insurance Notes Payable

The Company finances its annual commercial insurance premiums for its business and operations with a finance company. The dollar amount financed was $1.2 million for the policy. The outstanding principal balance on the premium finance note was $0.8 million at December 31, 2022 and $0.5 million at March 31, 2023. The Company makes equal monthly payments of principal and interest over the term of the notes which are generally 10 months or 11 months in term. The interest rate for the insurance policy is 6.31%.

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Related Party Transactions

3 Months Ended

Mar. 31, 2023

Related Party Transactions [Abstract]

Related Party Transactions

RELATED PARTY TRANSACTIONS

Secured Promissory Note - Related Party

Casey Crenshaw is the beneficial owner of 50% of The Modern Group and is deemed to jointly control The Modern Group with family members. The Company has a secured promissory note payable with MG Finance Co., Ltd, a subsidiary of The Modern Group. See additional discussion in Note 9.

Other Purchases and Sales

The Company purchases supplies and services from subsidiaries of The Modern Group. The Company made purchases of supplies and services totaling $0.1 million and $48 thousand for the three months ended March 31, 2023 and 2022, respectively. Office rent of $15 thousand was paid to The Modern Group during both the three months ended March 31, 2023 and 2022. As of March 31, 2023 and December 31, 2022, the Company had $31 thousand and $0.1 million, respectively, due to a subsidiary of The Modern Group included in accounts payable on the Condensed Consolidated Balance Sheets.

Chart E&C beneficially owns 8.0% of our outstanding common stock at March 31, 2023. The Company made no purchases from Chart E&C for the three months ended March 31, 2023 and made purchase from Chart E&C of $45 thousand for the three months ended March 31, 2022. The Company had no receivable due from Chart at March 31, 2023 or December 31, 2022. As of March 31, 2023 the Company had no amounts due to Chart E&C; however does have a commitment for the future delivery of equipment during 2023 totaling $0.6 million. At December 31, 2022, the Company had $0.5 million due to Chart E&C included in accounts payable on the Condensed Consolidated Balance Sheets.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

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 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.

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Stockholders' Equity and Stock-Based Compensation

3 Months Ended

Mar. 31, 2023

Equity [Abstract]

Stockholders’ Equity and Stock-Based Compensation

STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

The Company includes stock compensation expense within general and administrative expenses in the Condensed Consolidated Statements of Operations. During the three months ended March 31, 2023 and 2022, the Company recognized $0.6 million and $0.5 million of stock compensation expense, respectively.

The Company has a long term incentive plan (the “Amended and Restated Plan”) which provides for a maximum number of shares of common stock available for issuance of 4,000,000 shares. Awards under the Amended and Restated Plan may be granted to employees, officers and directors of the Company and affiliates, and any other person who provides services to the Company and its affiliates (including independent contractors and consultants of the Company and its subsidiaries). Awards may be granted in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalents, substitute awards, other stock-based awards, cash awards and/or any combination of the foregoing. No participant may receive a grant covering more than 2,000,000 shares of our common stock in any year and a non-employee member of the Board may not be granted more than 100,000 shares in any year.

Issuances of Common Stock

During the three months ended March 31, 2023, and 2022, shares of common stock were issued upon vesting of restricted stock units of 13,587 and 501,334, respectively. There were no stock options exercised during the three months ended March 31, 2023 or 2022.

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Net Income (Loss) Per Share

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Net Income (Loss) Per Share

NET INCOME (LOSS) PER SHARE

The calculation of net income (loss) per common share including the number of shares for both basic and diluted net income (loss) per share is as follows (in thousands, except share and per share data):

	Three Months Ended March 31,
	2023		2022
Weighted average shares:
Basic weighted average number of common shares outstanding	18,426,408		18,191,446
Dilutive securities (1),(2)	91,509		—
Total shares including dilutive securities	18,517,917		18,191,446
Net income (loss):
Net income (loss) from continuing operations	$	1,084	$	(359)
Loss from discontinued operations, net of income tax	—		(47)
Net income (loss)	$	1,084	$	(406)
Net income (loss) per common share:
Basic income (loss) per common share:
Basic net income (loss) per common share from continuing operations	$	0.06	$	(0.02)
Basic loss per common share from discontinued operations	—		—
Basic net income (loss) per common share	0.06		(0.02)
Diluted income (loss) per common share:
Diluted net income (loss) per common share from continuing operations	$	0.06	$	(0.02)
Diluted loss per common share from discontinued operations	—		—
Diluted net income (loss) per common share	0.06		(0.02)

_______________

(1)Dilutive securities include the dilutive effect of incremental shares for unvested restricted stock units ("RSUs") and unexercised stock options from the Company's stock-based compensation awards. The dilutive RSUs and stock options are calculated under the treasury stock method. For the three months ended March 31, 2023, 2,074,505 of stock options were excluded from dilutive shares because their effect would be anti-dilutive, and 105,843 of RSUs were excluded.

(2)The Company had no dilutive securities for the three months ended March 31, 2022 since the Company incurred net losses for both continuing and discontinued operations for these periods and inclusion would be antidilutive.

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Supplemental Cash Flow Information

3 Months Ended

Mar. 31, 2023

Cash and Cash Equivalents [Abstract]

Supplemental Cash Flow Information

SUPPLEMENTAL CASH FLOW INFORMATION

The Company's supplemental disclosure of cash flow information for the three months ended March 31, 2023 and 2022 is as follows (in thousands):

	Three Months Ended March 31,
Supplemental Disclosure of Cash Flow Information:	2023		2022
Interest paid	$	182	$	181
Income taxes paid	—		(14)
Significant non-cash investing and financing activities:
Equipment acquired from issuance of note payable	—		359
Acquisition of fixed assets included within accounts payable and accrued expenses	3,000		170

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Description of Business and Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Description of Business

Description of Business

Stabilis Solutions, Inc. and its subsidiaries (the “Company”, “Stabilis”, “our”, “us” or “we”) is an energy transition company that provides turnkey clean energy production, storage, transportation and fueling solutions primarily using liquefied natural gas (“LNG”) to multiple end markets.

The Company serves customers in diverse end markets, including aerospace, agriculture, energy, industrial, marine bunkering, mining, pipeline, remote power and utility markets. LNG can be used to deliver natural gas to locations where pipeline service is unavailable, has been interrupted, or needs to be supplemented. Additionally, LNG can be used as a partner fuel for renewable energy, and as an alternative to traditional fuel sources, such as distillate fuel oil (including diesel fuel and other fuel oils) and propane, among others to provide both environmental and economic benefits.

The Company also builds power and control systems for the energy industry in China through its 40% owned Chinese joint venture, BOMAY Electric Industries, Inc (“BOMAY”). BOMAY is accounted for as an equity investment.

Basis of Presentation and Consolidation

Basis of Presentation and Consolidation

The accompanying unaudited, interim condensed consolidated financial statements ("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 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 prevent the information presented herein from being misleading. The 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 periods presented are not necessarily indicative of the results of operations to be expected for the full year. The accompanying Condensed Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2022 included in the Company's Annual Report on Form 10-K, as filed on March 9, 2023.

All intercompany accounts and transactions have been eliminated in consolidation. In the Notes to Condensed Consolidated Financial Statements, all dollar amounts in tabulations are in thousands, unless otherwise indicated.

The Company believes that the Brazil Operations sold on October 31, 2022, met the criteria for discontinued operations presentation. The classification of these assets, liabilities, results of operations and cash flows as discontinued operations requires retrospective application to financial information for all prior periods presented. Accordingly, the operating results and cash flows for the three months ended March 31, 2022, have been recast on our Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows, respectively. There were no assets and liabilities from discontinued operations as of March 31, 2023 or December 31, 2022, and no results of operations or cash flows for the three months ended March 31, 2023. Unless otherwise noted, the amounts presented throughout the notes to our Financial Statements relate to our continuing operations. See Note 2 for further discussion of the Company's discontinued operations.

Use of Estimates in the Preparation of the Consolidated Financial Statements

Use of Estimates in the Preparation of the Consolidated Financial Statements

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 fair value of natural gas derivatives, 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.

Derivative instruments

Derivative instruments

The Company had certain natural gas derivative instruments as of March 31, 2023 and December 31, 2022. The Company recognizes all of its derivative instruments as either assets or liabilities which are recorded at fair value on its Condensed Consolidated Balance Sheet. The accounting for changes in the fair value of a derivative instrument depends on whether it qualifies for and has been designated as a hedge as well as the type of hedge. The Company has not designated its derivatives as hedges under U.S. GAAP and all resulting gains and losses from changes in the fair value of its derivative instruments are included within the Condensed Consolidated Statements of Operations. The Company did not enter into any derivative transactions for speculative purposes. See Note 4 for further discussion of the Company's derivatives.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses - Measurement of Credit Losses on Financial Instruments,” which changes the way companies evaluate credit losses for most financial assets and certain other instruments. For receivables, and other short-term financial instruments, companies will be required to use a new forward-looking “expected loss” model to evaluate impairment, potentially resulting in earlier recognition of allowances for losses. The new standard also requires enhanced disclosures, including the requirement to disclose the information used to track credit quality by year of origination. ASU No. 2016-13 was effective for the Company in the first quarter 2023. Adoption of this standard had no material impact to the Company's Condensed Consolidated Financial Statements.

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Discontinued Operations (Tables)

3 Months Ended

Mar. 31, 2023

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations

The following table summarizes the components of income from discontinued operations for the periods presented (in thousands):

	Three Months Ended March 31,
	2023		2022
Revenue	$	—	$	2,766
Costs and expenses	—		2,793
Other income (expense), net	—		(17)
Loss from discontinued operations before income taxes	$	—	$	(44)
Income tax expense	—		3
Loss from discontinued operations, net of income taxes	$	—	$	(47)

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Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Revenue Disaggregated by Source

The table below presents revenue disaggregated by source, for the three months ended March 31, 2023 and 2022 (in thousands):

	Three Months Ended March 31,
Revenues:	2023		2022
LNG Product	$	21,905	$	16,785
Rental	2,247		1,986
Service	2,066		1,395
Other	624		101
Total revenues	$	26,842	$	20,267

The table below presents revenue disaggregated by geographic location, for the three months ended March 31, 2023 and 2022 (in thousands):

	Three Months Ended March 31,
Revenues:	2023		2022
Mexico	$	2,819	$	3,766
United States	24,023		16,501
Total revenues	$	26,842	$	20,267

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Derivative Instruments (Tables)

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location

The following table presents the location and fair value of the Call Options at March 31, 2022 and December 31, 2022 on the Company's Condensed Consolidated Balance Sheets (in thousands):

Location on Condensed Consolidated Balance Sheet	March 31, 2023(1)		December 31, 2022(1)
Prepaid expenses and other current assets (2)	$	138	$	347
Right-of-use assets and other noncurrent assets (2)	13		225
	$	151	$	572

_______________

(1)    Amounts are presented on a gross basis.

(2)    The classification between current and noncurrent assets is based upon when the Call Options mature.

Derivative Instruments, Gain (Loss)

The table below presents the changes in the fair value of the Call Options for the three and three months ended March 31, 2023 as well as their net realized gains and losses.

	Three Months Ended March 31,
Changes in fair value of derivatives	2023		2022(1)
Fair value of natural gas derivatives, beginning of period	$	572	$	—
Unrealized gains (losses) transferred to realized gains (losses), net (3)	(252)		—
Change in unrealized loss on natural gas derivatives (2)	(169)		—
Fair value of natural gas derivatives, end of period	$	151	$	—
	Three Months Ended March 31,
Realized gain (loss) from derivative instruments	2023		2022(1)
Unrealized gains (losses) transferred to realized gains (losses), net	$	(252)	$	—
Derivative settlement payments received (3)	—		—
Realized gain (loss) from natural gas derivatives, net (3)	$	(252)	$	—

_______________

(1)    The Company did not have any derivative instruments during the three months ended March 31, 2022.

(2)    Amounts are presented as their own separate line item within the Company's Condensed Consolidated Statements of Operations.

(3)    Amounts are included within cost of LNG product on the Company's Condensed Consolidated Statements of Operations.

Schedule of Derivative Assets at Fair Value

The table below presents the changes in the fair value of the Call Options for the three and three months ended March 31, 2023 as well as their net realized gains and losses.

	Three Months Ended March 31,
Changes in fair value of derivatives	2023		2022(1)
Fair value of natural gas derivatives, beginning of period	$	572	$	—
Unrealized gains (losses) transferred to realized gains (losses), net (3)	(252)		—
Change in unrealized loss on natural gas derivatives (2)	(169)		—
Fair value of natural gas derivatives, end of period	$	151	$	—
	Three Months Ended March 31,
Realized gain (loss) from derivative instruments	2023		2022(1)
Unrealized gains (losses) transferred to realized gains (losses), net	$	(252)	$	—
Derivative settlement payments received (3)	—		—
Realized gain (loss) from natural gas derivatives, net (3)	$	(252)	$	—

_______________

(1)    The Company did not have any derivative instruments during the three months ended March 31, 2022.

(2)    Amounts are presented as their own separate line item within the Company's Condensed Consolidated Statements of Operations.

(3)    Amounts are included within cost of LNG product on the Company's Condensed Consolidated Statements of Operations.

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Prepaid Expenses and Other Current Assets (Tables)

3 Months Ended

Mar. 31, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Prepaid Expenses and Other Current Assets

The Company’s prepaid expenses and other current assets at March 31, 2023 and December 31, 2022 consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
Prepaid insurance	$	712	$	990
Prepaid supplier expenses	232		286
Other receivables	103		254
Natural gas derivatives at fair value, current	138		347
Deposits	203		236
Other	14		73
Total prepaid expenses and other current assets	$	1,402	$	2,186

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Property, Plant and Equipment (Tables)

3 Months Ended

Mar. 31, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment

The Company’s property, plant and equipment at March 31, 2023 and December 31, 2022 consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
Liquefaction plants and systems	$	47,645	$	47,636
Real property and buildings	2,065		2,057
Vehicles and tanker trailers and equipment	52,936		52,647
Computer and office equipment	459		470
Construction in progress	6,516		527
Leasehold improvements	30		31
	109,651		103,368
Less: accumulated depreciation	(57,722)		(55,699)
	$	51,929	$	47,669

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Investments in Foreign Joint Ventures (Tables)

3 Months Ended

Mar. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Financial Information of Foreign Joint Venture

The tables below present a summary of BOMAY's assets and liabilities and equity at March 31, 2023 and December 31, 2022, and its operational results for the three months ended March 31, 2023 and 2022 in U.S. dollars (in thousands):

	March 31, 2023		December 31, 2022
Assets:
Total current assets	$	92,669	$	88,536
Total non-current assets	2,964		3,016
Total assets	$	95,633	$	91,552
Liabilities and equity:
Total liabilities	$	61,581	$	58,482
Total joint ventures’ equity	34,052		33,070
Total liabilities and equity	$	95,633	$	91,552

	Three Months Ended March 31,
	2023		2022
Revenue	$	21,214	$	10,079
Gross Profit	2,403		1,609
Earnings	901		323

Schedule of Activity in Investment in Foreign Joint Ventures

The table below presents the components of our investment in BOMAY and a summary of the activity within those components for the three months ended March 31, 2023 in U.S. dollars (in thousands):

	Initial Investment at Merger (1), (2)		Undistributed Earnings		Cumulative Foreign Exchange Translation Adj		Investment in BOMAY
Balance at December 31, 2022	$	9,333	$	2,295	$	(22)	$	11,606
Equity in earnings	—		393		—		393
Less: dividend distributions	—		—		—		—
Foreign currency translation gain (loss)	—		—		93		93
Balance at March 31, 2023	$	9,333	$	2,688	$	71	$	12,092

_______________

(1)Accumulated statutory reserves in equity method investments of $2.7 million at March 31, 2023 and December 31, 2022 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 is being accreted over an original period of nine years (the expected life of the joint venture). The Company's accretion during the three months ended March 31, 2023 and 2022 both totaled approximately $32 thousand each, respectively, and is included in income from equity investment in foreign joint venture in the accompanying Condensed Consolidated Statements of Operations. The remaining basis difference, net of accumulated accretion at March 31, 2023 and December 31, 2022 is summarized in the following table (in thousands):

	March 31, 2023		December 31, 2022
Original basis difference	$	1,165	$	1,165
Less accumulated accretion	(475)		(443)
Net remaining basis difference at end of period	$	690	$	722

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Accrued Liabilities (Tables)

3 Months Ended

Mar. 31, 2023

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

The Company’s accrued liabilities at March 31, 2023 and December 31, 2022 consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
Compensation and benefits	$	1,709	$	3,111
Professional fees	421		454
LNG fuel and transportation	3,387		6,549
Accrued interest	33		33
Customer deposits and prepayments	1,406		8,456
Other taxes payable	552		701
Other accrued liabilities	3,173		338
Total accrued liabilities	$	10,681	$	19,642

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Debt (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of Carrying Value of Debt

The Company’s carrying value of debt, net of debt issuance costs at March 31, 2023 and December 31, 2022 consisted of the following (in thousands):

	March 31, 2023		December 31, 2022
Secured term note, net of debt issuance costs	$	8,661	$	8,650
Secured promissory note - related party	1,839		2,435
Insurance and other notes payable	489		848
Less: amounts due within one year	(2,328)		(3,283)
Total long-term debt	$	8,661	$	8,650

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Net Income (Loss) Per Share (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The calculation of net income (loss) per common share including the number of shares for both basic and diluted net income (loss) per share is as follows (in thousands, except share and per share data):

	Three Months Ended March 31,
	2023		2022
Weighted average shares:
Basic weighted average number of common shares outstanding	18,426,408		18,191,446
Dilutive securities (1),(2)	91,509		—
Total shares including dilutive securities	18,517,917		18,191,446
Net income (loss):
Net income (loss) from continuing operations	$	1,084	$	(359)
Loss from discontinued operations, net of income tax	—		(47)
Net income (loss)	$	1,084	$	(406)
Net income (loss) per common share:
Basic income (loss) per common share:
Basic net income (loss) per common share from continuing operations	$	0.06	$	(0.02)
Basic loss per common share from discontinued operations	—		—
Basic net income (loss) per common share	0.06		(0.02)
Diluted income (loss) per common share:
Diluted net income (loss) per common share from continuing operations	$	0.06	$	(0.02)
Diluted loss per common share from discontinued operations	—		—
Diluted net income (loss) per common share	0.06		(0.02)

_______________

(1)Dilutive securities include the dilutive effect of incremental shares for unvested restricted stock units ("RSUs") and unexercised stock options from the Company's stock-based compensation awards. The dilutive RSUs and stock options are calculated under the treasury stock method. For the three months ended March 31, 2023, 2,074,505 of stock options were excluded from dilutive shares because their effect would be anti-dilutive, and 105,843 of RSUs were excluded.

(2)The Company had no dilutive securities for the three months ended March 31, 2022 since the Company incurred net losses for both continuing and discontinued operations for these periods and inclusion would be antidilutive.

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Supplemental Cash Flow Information (Tables)

3 Months Ended

Mar. 31, 2023

Cash and Cash Equivalents [Abstract]

Schedule of Cash Flow, Supplemental Disclosures

The Company's supplemental disclosure of cash flow information for the three months ended March 31, 2023 and 2022 is as follows (in thousands):

	Three Months Ended March 31,
Supplemental Disclosure of Cash Flow Information:	2023		2022
Interest paid	$	182	$	181
Income taxes paid	—		(14)
Significant non-cash investing and financing activities:
Equipment acquired from issuance of note payable	—		359
Acquisition of fixed assets included within accounts payable and accrued expenses	3,000		170

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Description of Business and Basis of Presentation (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Disposal group, including discontinued operation, assets	$ 0	$ 0
Disposal group, including discontinued operation, liabilities	$ 0	$ 0
Bomay
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Percentage of interest in a joint venture	40.00%

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Discontinued Operations - Summary Of Income From Discontinued Operations, Net Of Tax (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss from discontinued operations, net of income taxes	$ 0	$ (47)
Discontinued Operations | Brazil Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenue	0	2,766
Costs and expenses	0	2,793
Other income (expense), net	0	(17)
Loss from discontinued operations before income taxes	0	(44)
Income tax expense	0	3
Loss from discontinued operations, net of income taxes	$ 0	$ (47)

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Discontinued Operations - Additional Information (Details)	3 Months Ended
	Mar. 31, 2023 segment
Discontinued Operations and Disposal Groups [Abstract]
Number of operating segments	1

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Revenue Recognition - Additional Information (Details)	3 Months Ended
	Mar. 31, 2023
Revenue from Contract with Customer [Abstract]
Period of recognition, performance obligations	30 days

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Revenue Recognition - Schedule of Revenue Disaggregated by Source and Location (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Total revenues	$ 26,842	$ 20,267
Mexico
Disaggregation of Revenue [Line Items]
Total revenues	2,819	3,766
United States
Disaggregation of Revenue [Line Items]
Total revenues	24,023	16,501
LNG product
Disaggregation of Revenue [Line Items]
Total revenues	21,905	16,785
Rental
Disaggregation of Revenue [Line Items]
Total revenues	2,247	1,986
Service
Disaggregation of Revenue [Line Items]
Total revenues	2,066	1,395
Other
Disaggregation of Revenue [Line Items]
Total revenues	$ 624	$ 101

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Derivative Instruments - Additional Information (Details) MMBTU in Millions	3 Months Ended
	Mar. 31, 2023 MMBTU
Call Option
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Nonmonetary notional amount, energy measure	1.1

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Derivative Instruments - Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location (Details) - Call Option - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative asset	$ 151	$ 572	$ 0	$ 0
Prepaid expenses and other current assets
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative asset	138	347
Right-of-use assets and other noncurrent assets
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative asset	$ 13	$ 225

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Derivative Instruments - Schedule of Derivative Assets at Fair Value (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Changes in fair value of derivatives
Change in unrealized loss on natural gas derivatives	$ (169)	$ 0
Realized gain (loss) from derivative instruments
Realized gain (loss) from natural gas derivatives, net	(252)	0
Call Option
Changes in fair value of derivatives
Fair value of natural gas derivatives, beginning of period	572	0
Unrealized gains (losses) transferred to realized gains (losses), net	(252)	0
Change in unrealized loss on natural gas derivatives	(169)	0
Fair value of natural gas derivatives, end of period	151	0
Realized gain (loss) from derivative instruments
Unrealized gains (losses) transferred to realized gains (losses), net	(252)	0
Derivative settlement payments received	$ 0	$ 0

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Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Prepaid expenses and other current assets
Prepaid insurance	$ 712	$ 990
Prepaid supplier expenses	232	286
Other receivables	$ 103	254
Derivative Asset, Current, Statement of Financial Position [Extensible Enumeration]	Total prepaid expenses and other current assets
Natural gas derivatives at fair value, current	$ 138	347
Deposits	203	236
Other	14	73
Total prepaid expenses and other current assets	$ 1,402	$ 2,186

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Property, Plant and Equipment - Schedule of Property Plant and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Cost	$ 109,651	$ 103,368
Less: accumulated depreciation	(57,722)	(55,699)
Property, plant and equipment, net	51,929	47,669
Liquefaction plants and systems
Property, Plant and Equipment [Line Items]
Cost	47,645	47,636
Real property and buildings
Property, Plant and Equipment [Line Items]
Cost	2,065	2,057
Vehicles and tanker trailers and equipment
Property, Plant and Equipment [Line Items]
Cost	52,936	52,647
Computer and office equipment
Property, Plant and Equipment [Line Items]
Cost	459	470
Construction in progress
Property, Plant and Equipment [Line Items]
Cost	6,516	527
Leasehold improvements
Property, Plant and Equipment [Line Items]
Cost	$ 30	$ 31

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Property, Plant and Equipment - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Property, Plant and Equipment [Abstract]
Depreciation	$ 2,011	$ 2,277

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Investments in Foreign Joint Ventures - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Schedule of Equity Method Investments [Line Items]
Revenues	$ 26,842,000	$ 20,267,000
Affiliated Entity
Schedule of Equity Method Investments [Line Items]
Revenues	$ 0	$ 0
Bomay
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership percentage	40.00%
Bomay | Baoji Oilfield Machinery Co., Ltd.
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership percentage	51.00%
Bomay | AA Energies, Inc.
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership percentage	9.00%

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Investments in Foreign Joint Ventures - Schedule of Financial Information of Foreign Joint Venture (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Dec. 31, 2021
Assets:
Total current assets	$ 18,029		$ 32,217
Total assets	86,927		96,580
Liabilities and equity:
Total liabilities	25,200		36,713
Total joint ventures’ equity	61,727	$ 61,561	59,867	$ 61,059
Total liabilities and stockholders’ equity	86,927		96,580
Earnings	1,084	(406)
Equity Method Investment, Nonconsolidated Investee or Group of Investees
Assets:
Total current assets	92,669		88,536
Total non-current assets	2,964		3,016
Total assets	95,633		91,552
Liabilities and equity:
Total liabilities	61,581		58,482
Total joint ventures’ equity	34,052		33,070
Total liabilities and stockholders’ equity	95,633		$ 91,552
Revenue	21,214	10,079
Gross Profit	2,403	1,609
Earnings	$ 901	$ 323

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Investments in Foreign Joint Ventures - Schedule of Activity in Investment in Foreign Joint Ventures (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Investment in BOMAY
Investment in BOMAY at December 31, 2022	$ 11,606
Equity in earnings	393	$ 161
Investment in BOMAY at March 31, 2023	12,092
Accretion during period	32	$ 32
Original basis difference	1,165		$ 1,165
Less accumulated accretion	(475)		(443)
Net remaining basis difference at end of period	690		722
Bomay
Initial Investment at Merger
Initial Investment at Merger at December 31, 2022	9,333
Initial Investment at Merger at March 31, 2023	9,333
Undistributed Earnings
Undistributed earnings at December 31, 2022	2,295
Equity in earnings	393
Less: dividend distributions	0
Undistributed earnings at March 31, 2023	2,688
Cumulative Foreign Exchange Translation Adj
Cumulative foreign currency translation at December 31, 2022	(22)
Foreign currency translation gain (loss)	93
Cumulative foreign currency translation at March 31, 2022	71
Investment in BOMAY
Investment in BOMAY at December 31, 2022	11,606
Equity in earnings	393
Less: dividend distributions	0
Foreign currency translation gain (loss)	93
Investment in BOMAY at March 31, 2023	12,092
Accumulated statutory reserves in equity method investments	$ 2,700		$ 2,700
Percentage of interest in a joint venture	40.00%
Remaining life of joint venture	9 years

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Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Accrued liabilities
Compensation and benefits	$ 1,709	$ 3,111
Professional fees	421	454
LNG fuel and transportation	3,387	6,549
Accrued interest	33	33
Customer deposits and prepayments	1,406	8,456
Other taxes payable	552	701
Other accrued liabilities	3,173	338
Total accrued liabilities	$ 10,681	$ 19,642

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Debt - Schedule of Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Disclosure [Abstract]
Secured term note, net of debt issuance costs	$ 8,661	$ 8,650
Secured promissory note - related party	1,839	2,435
Insurance and other notes payable	489	848
Less: amounts due within one year	(2,328)	(3,283)
Total long-term debt	$ 8,661	$ 8,650

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Debt - Additional Information (Details)		3 Months Ended
	Apr. 08, 2021 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Aug. 16, 2019 USD ($)
Debt Instrument [Line Items]
Secured promissory note - related party		$ 1,839,000	$ 2,435,000
Annual commercial insurance premiums		1,200,000
Outstanding principal amount of premium financed			800,000
Insurance and other notes payable		$ 489,000	$ 848,000
Maximum
Debt Instrument [Line Items]
Insurance terms		11 months
Minimum
Debt Instrument [Line Items]
Insurance terms		10 months
Loan Agreement | AmeriState Bank
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 10,000,000
Proceeds from loan		$ 9,000,000
Interest rate	5.75%
Debt-to-net-worth ratio		9.1
Debt service coverage ratio		1.2
Loan Agreement | AmeriState Bank | Prime Rate
Debt Instrument [Line Items]
Prime lending rate plus	2.50%
Secured Promissory Note [Member] | Secured Debt | M/G Finance Co., Ltd.
Debt Instrument [Line Items]
Debt instrument, face amount				$ 5,000,000
Secured Promissory Note [Member] | Secured Debt | M/G Finance Co., Ltd. | Maximum
Debt Instrument [Line Items]
Interest rate		12.00%
Secured Promissory Note [Member] | Secured Debt | M/G Finance Co., Ltd. | Minimum
Debt Instrument [Line Items]
Interest rate		6.00%
Insurance Notes Payable, 2022 to 2023
Debt Instrument [Line Items]
Insurance notes interest rate (as a percent)		6.31%

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Related Party Transactions (Details) - Affiliated Entity - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Related Party Transaction [Line Items]
Due to related parties	$ 600,000
Common stock, ownership percentage	8.00%
Purchases from related parties	$ 0	$ 45,000
Due to related parties	0		$ 500,000
TMG
Related Party Transaction [Line Items]
Purchase of supplies and services	100,000	48,000
Payments of office rent	15,000	$ 15,000
Due to related parties	31,000		100,000
Due from related parties	$ 0		$ 0
TMG | Board of Directors Chairman
Related Party Transaction [Line Items]
Percentage of beneficial ownership	50.00%

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Stockholders' Equity and Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Class of Stock [Line Items]
Stock-based compensation expense	$ 589	$ 531
Stock options exercised	$ 0	$ 0
RSUs
Class of Stock [Line Items]
Restricted stock award, gross	13,587	501,334
Participant
Class of Stock [Line Items]
Grant limit (in shares)	2,000,000
Non-Employee Board Member
Class of Stock [Line Items]
Grant limit (in shares)	100,000
Amended and Restated 2019 Long Term Incentive Plan
Class of Stock [Line Items]
Common stock available for issuance (in shares)	4,000,000

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Net Income (Loss) Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share [Abstract]
Basic weighted average number of common shares outstanding (in shares)	18,426,408	18,191,446
Dilutive securities (in shares)	91,509	0
Total shares including dilutive securities (in shares)	18,517,917	18,191,446
Net income (loss) from continuing operations	$ 1,084	$ (359)
Loss from discontinued operations, net of income tax	0	(47)
Net income (loss)	$ 1,084	$ (406)
Basic income (loss) per common share:
Basic net income (loss) per common share from continuing operations (in usd per share)	$ 0.06	$ (0.02)
Basic loss per common share from discontinued operations (in usd per share)	0	0
Basic net income (loss) per common share (in usd per share)	0.06	(0.02)
Diluted income (loss) per common share:
Diluted net income (loss) per common share from continuing operations (in usd per share)	0.06	(0.02)
Diluted loss per common share from discontinued operations (in usd per share)	0	0
Diluted net income (loss) per common share (in usd per share)	$ 0.06	$ (0.02)
Antidilutive securities excluded from computation of earnings per share, amount (in shares)		0

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Net Income (Loss) Per Share - Narrative (Details) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount (in shares)		0
Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount (in shares)	2,074,505
RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount (in shares)	105,843

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Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Supplemental Disclosure of Cash Flow Information:
Interest paid	$ 182	$ 181
Income taxes paid	0	(14)
Significant non-cash investing and financing activities:
Equipment acquired from issuance of note payable	0	359
Acquisition of fixed assets included within accounts payable and accrued expenses	$ 3,000	$ 170