slng20250630

slng20250630_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the Quarterly Period Ended June 30, 2025

☐	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 August 4, 2025, there were 18,596,301 outstanding shares of our common stock, par value $.001 per share.

Table of Contents

STABILIS SOLUTIONS, INC. AND SUBSIDIARIES

FORM 10-Q Index

For the Quarterly Period Ended June 30, 2025

		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	17
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

Table of Contents

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 February 25, 2025, as well as any 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.

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS. (Unaudited)

Stabilis Solutions, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

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

	*June 30,*			*December 31,*
	*2025*			*2024*
*Assets*
Current assets:
Cash and cash equivalents	$	12,220		$	8,987
Accounts receivable, net		4,397			6,239
Inventories, net		180			345
Prepaid expenses and other current assets		1,039			1,902
Total current assets		17,836			17,473
Property, plant and equipment:
Cost		118,596			117,246
Less accumulated depreciation		(69,048	)		(65,518	)
Property, plant and equipment, net		49,548			51,728
Goodwill		4,314			4,314
Investments in foreign joint ventures		10,760			11,659
Right-of-use assets and other noncurrent assets		786			410
Total assets	$	83,244		$	85,584
*Liabilities and Stockholders’ Equity*
Current liabilities:
Accounts payable	$	5,950		$	5,667
Accrued liabilities		3,456			3,566
Current portion of long-term notes payable		1,295			2,010
Current portion of finance and operating lease obligations		640			384
Total current liabilities		11,341			11,627
Long-term notes payable, net of current portion and debt issuance costs		6,336			6,848
Long-term portion of operating lease obligations		85			101
Total liabilities		17,762			18,576
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock; $0.001 par value, 1,000,000 shares authorized, no shares issued and outstanding at June 30, 2025 and December 31, 2024		—			—
Common stock; $0.001 par value, 37,500,000 shares authorized, 18,596,301 and 18,585,014 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively		19			19
Additional paid-in capital		103,644			103,214
Accumulated other comprehensive loss		(323	)		(578	)
Accumulated deficit		(37,858	)		(35,647	)
Total stockholders’ equity		65,482			67,008
Total liabilities and stockholders’ equity	$	83,244		$	85,584

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

Table of Contents

Stabilis Solutions, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

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

	*Three Months Ended*						*Six Months Ended*
	*June 30,*						*June 30,*
	*2025*			*2024*			*2025*			*2024*
Revenues:
Revenues	$	17,309		$	18,598		$	34,647		$	38,368
Operating expenses:
Cost of revenues		12,724			13,550			25,512			27,064
Change in unrealized (gain) loss on natural gas derivatives		60			(82	)		(24	)		(334	)
Selling, general and administrative expenses		3,131			3,331			8,064			6,787
Gain from disposal of fixed assets		—			(72	)		(103	)		(199	)
Depreciation expense		1,860			1,768			3,727			3,568
Total operating expenses		17,775			18,495			37,176			36,886
Income (loss) from operations before equity income		(466	)		103			(2,529	)		1,482
Net equity income from foreign joint venture operations:
Income from equity investment in foreign joint venture		120			340			537			587
Foreign joint venture operating related expenses		(70	)		(45	)		(119	)		(95	)
Net equity income from foreign joint venture operations		50			295			418			492
Income (loss) from operations		(416	)		398			(2,111	)		1,974
Other income (expense):
Interest income (expense), net		24			28			45			24
Other income (expense), net		(24	)		26			(36	)		5
Total other income (expense)		—			54			9			29
Net income (loss) before income tax expense		(416	)		452			(2,102	)		2,003
Income tax expense		197			425			109			507
Net income (loss)	$	(613	)	$	27		$	(2,211	)	$	1,496

Net income (loss) per common share:
Basic and diluted per common share	$	(0.03	)	$	0.00		$	(0.12	)	$	0.08

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

Table of Contents

Stabilis Solutions, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited, in thousands)

	*Three Months Ended*					*Six Months Ended*
	*June 30,*					*June 30,*
	*2025*			*2024*		*2025*			*2024*
Net income (loss)	$	(613	)	$	27	$	(2,211	)	$	1,496
Foreign currency translation adjustment, net of tax		184			52		255			(414	)
Total comprehensive income (loss)	$	(429	)	$	79	$	(1,956	)	$	1,082

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

Table of Contents

Stabilis Solutions, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited, in thousands, except share data)

									*Accumulated*
									*Other*
	*Common Stock*					*Additional*			*Comprehensive*			*Accumulated*
	*Shares*			*Amount*		*Paid-in Capital*			*Income (Loss)*			*Deficit*			*Total*
Balance at December 31, 2023		18,573,391		$	19	$	102,057		$	(18	)	$	(40,246	)	$	61,812
Common stock issued from vesting of stock-based awards		13,588			—		—			—			—			—
Stock-based compensation		—			—		383			—			—			383
Employee tax payments from stock-based withholding		(1,965	)		—		(9	)		—			—			(9	)
Net income		—			—		—			—			1,469			1,469
Other comprehensive loss, net of tax		—			—		—			(466	)		—			(466	)
Balance at March 31, 2024		18,585,014			19		102,431			(484	)		(38,777	)		63,189
Stock-based compensation		—			—		408			—			—			408
Net income		—			—		—			—			27			27
Other comprehensive income, net of tax		—			—		—			52			—			52
Balance at June 30, 2024		18,585,014		$	19	$	102,839		$	(432	)	$	(38,750	)	$	63,676

									*Accumulated*
									*Other*
	*Common Stock*					*Additional*			*Comprehensive*			*Accumulated*
	*Shares*			*Amount*		*Paid-in Capital*			*Income (Loss)*			*Deficit*			*Total*
Balance at December 31, 2024		18,585,014		$	19	$	103,214		$	(578	)	$	(35,647	)	$	67,008
Common stock issued from vesting of stock-based awards		13,589			—		—			—			—			—
Stock-based compensation		—			—		447			—			—			447
Employee tax payments from stock-based withholding		(2,302	)		—		(17	)		—			—			(17	)
Net loss		—			—		—			—			(1,598	)		(1,598	)
Other comprehensive income, net of tax		—			—		—			71			—			71
Balance at March 31, 2025		18,596,301			19		103,644			(507	)		(37,245	)		65,911
Net loss		—			—		—			—			(613	)		(613	)
Other comprehensive income, net of tax		—			—		—			184			—			184
Balance at June 30, 2025		18,596,301		$	19	$	103,644		$	(323	)	$	(37,858	)	$	65,482

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

Table of Contents

Stabilis Solutions, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)

	*Six Months Ended*
	*June 30,*
	*2025*			*2024*
Cash flows from operating activities:
Net income (loss)	$	(2,211	)	$	1,496
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation		3,727			3,568
Stock-based compensation expense		447			791
Bad debt expense		113			68
Gain on disposal of assets		(103	)		(199	)
Income from equity investment in joint venture		(537	)		(587	)
Distributions from equity investment in joint venture		1,637			1,716
Cash settlements from natural gas derivatives, net		239			(359	)
Realized and unrealized (gains) losses on natural gas derivatives, net		141			30
Changes in operating assets and liabilities:
Accounts receivable		1,745			1,736
Prepaid expenses and other current assets		636			680
Accounts payable and accrued liabilities		(331	)		(133	)
Other		37			160
Net cash provided by operating activities		5,540			8,967
Cash flows from investing activities:
Acquisition of fixed assets		(1,122	)		(2,249	)
Proceeds from sale of fixed assets		211			279
Net cash used in investing activities		(911	)		(1,970	)
Cash flows from financing activities:
Payments on short- and long-term notes payable and finance leases		(1,351	)		(875	)
Payment of debt issuance costs		(42	)		—
Employee tax payments from restricted stock withholdings		(17	)		(9	)
Net cash used in financing activities		(1,410	)		(884	)
Effect of exchange rate changes on cash		14			(4	)
Net increase in cash and cash equivalents		3,233			6,109
Cash and cash equivalents, beginning of period		8,987			5,374
Cash and cash equivalents, end of period	$	12,220		$	11,483

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements

Table of Contents

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 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 under the equity method.

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 within this report 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, 2024 included in the Company's Annual Report on Form 10-K, as filed on February 25, 2025.

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.

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 determination of fair value of equity-based awards, fair value of natural gas derivatives, 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.

Segment Reporting

In accordance with ASC Topic 280 - "Segment Reporting (ASC 280)" the Company has determined that it has a single operating and reporting segment. As a result, the Company's segment accounting policies are the same as described herein and the Company does not have any material intra-segment sales and transfers of assets. The Company's Chief Operating Decision Maker ("CODM") is the Chief Executive Officer (the "CEO"). The CEO, with the Chief Financial Officer assesses the performance and makes operating decisions of the Company on a consolidated basis, based on the Company's net increase in shareholder's equity resulting from operations ("net income"). Company assets are not reviewed by the CODM at a different asset level or category, but at the consolidated level. As the Company's operations are comprised of a single operating segment, the segment assets are reflected on the accompanying Condensed Consolidated Balance Sheets as "total assets" and the significant segment expenses are listed on the accompanying Condensed Consolidated Statement of Operations.

Derivative Instruments

The Company had certain natural gas derivative instruments as of December 31, 2024. At June 30, 2025 the Company had no transactions accounted for as derivatives as they had matured. At December 31, 2024, the fair value of the Company's derivatives was $0.1 million. 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. The Company did not enter into any derivative transactions for speculative purposes during the periods presented. 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.

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" which requires companies to disclose disaggregated information about certain costs and expenses in the notes to the financial statements. ASU 2024-03 is effective for companies for annual reporting periods beginning after December 15, 2026. The requirements can be applied either prospectively or retrospectively. Although early adoption is permitted, the Company will adopt the pronouncement when the pronouncement becomes effective on January 1, 2027. The Company does not expect the adoption of ASU 2024-03 to have a significant impact on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures", which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. Under ASU 2023-09, companies must consistently categorize and provide greater disaggregation of information in the rate reconciliation and further disaggregate income taxes paid. ASU 2023-09 is effective for companies for annual reporting periods beginning after January 1, 2025. The Company does not expect the adoption of ASU 2023-09 to have a significant impact on its consolidated financial statements.

Table of Contents

2. 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. Revenues from contracts with customers are disaggregated into (1) LNG Product (2) rental (3) service and (4) other. Certain contracts may include multiple goods or services such as the usage of equipment and delivery of field support services that are bundled into an all-in price to the customer for each gallon of LNG delivered. Revenue recognition under these contracts requires significant judgment by the Company in order to determine the appropriate accounting for these transactions, including whether performance obligations should be accounted for separately versus together, how the price should be allocated among the performance obligations, and when to recognize revenue for each performance obligation. The Company has determined that these contracts have multiple performance obligations and the Company allocates the contract price to each performance obligation using its best estimates of the respective standalone selling price of each distinct good or service at the time the contract was negotiated.

LNG Product revenues

LNG Product revenues represent the sale of LNG from both produced and purchased sources as well as the transportation performed to deliver the LNG to our customer location. LNG Product revenues are recognized upon delivery of the LNG 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 supply of LNG. The Company does not differentiate between the revenue from the sale of LNG production and purchased LNG as the criteria for revenue recognition are identical. Some of our contracts contain minimum take-or-pay amounts where a customer has agreed to source a minimum volume of LNG under the contract. Take or pay revenues are only recognized when the customer has failed to take the minimum contracted volumes upon completion of the time period specified within the contract and the Company has the unconditional right to receive payment for the take or pay amount. Certain of our 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. Our LNG contracts are generally one to 24 months in duration.

Rental revenues

Rental revenues are generated from the rental of cryogenic equipment to our customers. Rental revenues are not dependent upon the gallons delivered but based upon day rates or monthly rates for the use of equipment as specifically established within the contract and are disaggregated from LNG Product revenues. 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. The stated rental rates within each contract are representative of the stand-alone rental rates at the time the contract was negotiated.

Service revenues

Service revenues are generated from engineering and field support services and represent the human resources provided to the customer to support the use of LNG at the customer’s job site. These include support and costs for mobilization and demobilization of equipment at customer sites as well as onsite technical support while customers are consuming LNG. Service revenues are not dependent upon the gallons delivered or rental period but based upon the specific contractual terms and can be based on an event (i.e. mobilization or demobilization) or an hourly rate as specifically established within the contract and are disaggregated from LNG Product revenues and Rental revenues. Service revenue is recognized as the event is completed or work is done. The stated hourly labor rates in each contract are representative of the stand-alone hourly rates at the time the contract was negotiated.

Other revenues

Other revenues are items that, due to their nature, are disaggregated from the categories mentioned above such as expenses incurred by the Company on behalf of the customer that we contractually rebill to our customers on a cost-plus basis.

Disaggregated revenues

The table below presents revenue disaggregated by source, for the three and six months ended June 30, 2025 and 2024 (in thousands):

	*Three Months Ended*				*Six Months Ended*
	*June 30,*				*June 30,*
Revenues:	*2025*		*2024*		*2025*		*2024*
LNG Product	$	14,628	$	14,626	$	28,574	$	30,039
Rental		1,296		1,682		2,846		3,855
Service		1,169		1,693		2,874		3,617
Other		216		597		353		857
Total revenues	$	17,309	$	18,598	$	34,647	$	38,368

Table of Contents

The table below presents revenue disaggregated by geographic location, for the three and six months ended June 30, 2025 and 2024 (in thousands):

	*Three Months Ended*				*Six Months Ended*
	*June 30,*				*June 30,*
Revenues:	*2025*		*2024*		*2025*		*2024*
United States	$	16,435	$	17,373	$	32,958	$	35,880
Mexico		874		1,225		1,689		2,488
Total revenues	$	17,309	$	18,598	$	34,647	$	38,368

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 is 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.

3. PREPAID EXPENSES AND OTHER CURRENT ASSETS

The Company’s prepaid expenses and other current assets at June 30, 2025 and December 31, 2024 consisted of the following (in thousands):

	*June 30,*		*December 31,*
	*2025*		*2024*
Prepaid insurance	$	294	$	1,044
Prepaid supplier expenses		289		167
Other receivables		217		204
Natural gas derivatives at fair value, current		—		207
Deposits		99		129
Other		140		151
Total prepaid expenses and other current assets	$	1,039	$	1,902

4. PROPERTY, PLANT AND EQUIPMENT

The Company’s property, plant and equipment at June 30, 2025 and December 31, 2024 consisted of the following (in thousands):

	*June 30,*			*December 31,*
	*2025*			*2024*
Liquefaction plants and systems	$	56,768		$	56,752
Real property and buildings		2,082			2,082
Vehicles and tanker trailers and equipment		50,049			49,754
Computer and office equipment		688			545
Construction in progress		8,977			8,082
Leasehold improvements		32			31
		118,596			117,246
Less: accumulated depreciation		(69,048	)		(65,518	)
	$	49,548		$	51,728

Depreciation expense totaled $1.9 million and $1.8 million for the three months ended June 30, 2025 and June 30, 2024, respectively. Depreciation expense totaled $3.7 million and $3.6 million for the six months ended June 30, 2025 and June 30, 2024, respectively, all of which is included in the Condensed Consolidated Statements of Operations as a separate line item.

Table of Contents

5. 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 and six months ended June 30, 2025 and 2024.

We account for our investment in BOMAY using the equity method of accounting. Under the equity method, the Company’s share of the joint venture operations earnings or losses is recognized in the Condensed Consolidated Statements of Operations as equity income (loss) from foreign joint venture operations. Joint venture income increases the carrying value of the joint venture and joint venture losses reduce the carrying value. Dividends received from the joint venture reduce the carrying value. The Company considers dividend distributions received from its equity method investments which do not exceed cumulative equity in earnings subsequent to the date of investment to be a return on investment and classifies these distributions as operating activities in the accompanying Condensed Consolidated Statements of Cash Flows.

The tables below present a summary of BOMAY's assets, liabilities and equity at June 30, 2025 and December 31, 2024, and its operational results for the three and six months ended June 30, 2025 and 2024 in U.S. dollars (in thousands):

		*June 30,*				*December 31,*
		*2025*