UNITED
STATES



SECURITIES
AND EXCHANGE COMMISSION



WASHINGTON,
DC 20549

---

FORM
10-Q

---





(Mark one)

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



For the quarterly period ended: June
30, 2016



Or



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



For the transition period from:________to________



Commission File Number: 0-30746





---



FRONTIER
OILFIELD SERVICES, INC.

(Exact name of registrant as specified in
its charter)

---





|Texas                                                          | 75-2592165                             
|-------------------------------------------------------------- | ---------------------------------------
|(State
or other jurisdiction of
incorporation or organization) | (I.R.S.
Employer
Identification Number)
|                                                               |                                        
|220
Travis Street, Suite 501, Shreveport, Louisiana 71101      | 71101                                  
|(Address
of principal executive offices)                       | (Zip
Code)                             



(972) 234-2610

(Registrant’s telephone number, including
area code)



N/A



(Former name, former address and former
fiscal year, if changed since last report)

---







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
and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). ☐  Yes    ☒  No



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





|Large Accelerated Filer  ☐                                            | Accelerated Filer         | ☐
|--------------------------------------------------------------------- | ------------------------- | -
|                                                                      |                           |  
|Non-Accelerated Filer    ☐(Do not check if smaller reporting company) | Smaller Reporting Company | ☒





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 15, 2016 there were 11,855,276 shares of common stock,
par value $0.01 per share, outstanding.















FRONTIER
OILFIELD SERVICES, INC.

Index





|                               | Pg. No. 
|------------------------------ | --------
|PART I – Financial Information |         
|                               | Item 1. 
|                               |         
|                               |         
|                               |         
|                               |         
|                               | Item 2. 
|                               | Item 3. 
|                               | Item 4. 
|                               |         
|PART II – Other Information    |         
|                               | Item 1. 
|                               | Item 1A.
|                               | Item 2. 
|                               | Item 3. 
|                               | Item 5. 
|                               | Item 6. 
|                               |         
|SIGNATURES                     |         















PART
1 — FINANCIAL INFORMATION



ITEM 1.
FINANCIAL STATEMENTS



FRONTIER
OILFIELD SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED
BALANCE SHEETS





|                                                                                                                                                                                       |  | June
    30,
    2016 |             | December
    31,
    2015
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------- | ----------- | -------------------------
|                                                                                                                                                                                       |  |                       |             |                          
|ASSETS                                                                                                                                                                                 |  |                       |             |                          
|Current
    Assets:                                                                                                                                                                    |  |                       |             |                          
|Cash                                                                                                                                                                                   |  | $                     | 48,995      |                          
|Restricted
    cash                                                                                                                                                                    |  |                       | —           |                          
|Accounts
    receivable, net                                                                                                                                                           |  |                       | 153,605     |                          
|Inventory                                                                                                                                                                              |  |                       | —           |                          
|Advance
    to shareholder                                                                                                                                                             |  |                       | 132,190     |                          
|Total
    current assets                                                                                                                                                               |  |                       | 334,790     |                          
|                                                                                                                                                                                       |  |                       |             |                          
|Property
    and equipment, at cost                                                                                                                                                    |  |                       | 9,170,379   |                          
|Less:
    accumulated depreciation                                                                                                                                                     |  |                       | (4,088,533  | )                        
|Property
    and equipment, net                                                                                                                                                        |  |                       | 5,081,846   |                          
|                                                                                                                                                                                       |  |                       |             |                          
|Intangibles,
    net                                                                                                                                                                   |  |                       | 445,122     |                          
|Deposits                                                                                                                                                                               |  |                       | 27,302      |                          
|Total
    other assets                                                                                                                                                                 |  |                       | 472,424     |                          
|Total
    Assets                                                                                                                                                                       |  | $                     | 5,889,060   |                          
|                                                                                                                                                                                       |  |                       |             |                          
|LIABILITIES
    AND STOCKHOLDERS’ DEFICIT                                                                                                                                              |  |                       |             |                          
|Current
    Liabilities:                                                                                                                                                               |  |                       |             |                          
|Current
    maturities of long-term debt, primarily stockholders,   net of deferred loan fees                                                                                          |  | $                     | 8,333,449   |                          
|Accounts
    payable                                                                                                                                                                   |  |                       | 2,613,617   |                          
|Accrued
    liabilities                                                                                                                                                                |  |                       | 1,788,787   |                          
|Total
    current liabilities                                                                                                                                                          |  |                       | 12,735,853  |                          
|Long-term
    debt, less current maturities                                                                                                                                            |  |                       | —           |                          
|Total
    Liabilities                                                                                                                                                                  |  |                       | 12,735,853  |                          
|Commitments
    and Contingencies (Note 7)                                                                                                                                             |  |                       |             |                          
|Stockholders’
    Deficit:                                                                                                                                                             |  |                       |             |                          
|Common
    stock — $.01 par value; authorized 100,000,000 shares; 11,855,276 and 11,537,276 shares issued and outstanding at June
    30,     2016 and December 31, 2015, respectively |  |                       | 118,553     |                          
|Additional
    paid-in capital                                                                                                                                                         |  |                       | 32,925,243  |                          
|Accumulated
    deficit                                                                                                                                                                |  |                       | (39,890,589 | )                        
|Total
    stockholders’ deficit                                                                                                                                                        |  |                       | (6,846,793  | )                        
|Total
    Liabilities and Stockholders’ Deficit                                                                                                                                        |  | $                     | 5,889,060   |                          



The
accompanying notes are an integral part of these consolidated financial statements.





F-1







FRONTIER
OILFIELD SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF OPERATIONS





|                                                      |  | For
    the Three Months Ended |            | For
    the Six Months Ended
|----------------------------------------------------- |  | ------------------------------ | ---------- | ----------------------------
|                                                      |  | June
    30,
    2016          |            | June
    30,
    2015       
|                                                      |  |                                |            |                             
|Revenue,
    net of discounts                         |  | $                              | 375,774    |                             
|Costs
    and expenses:                               |  |                                |            |                             
|Direct
    operating costs                            |  |                                | 193,317    |                             
|Indirect
    operating costs                          |  |                                | 110,263    |                             
|General
    and administrative                        |  |                                | 134,206    |                             
|Depreciation
    and amortization                     |  |                                | 115,322    |                             
|Write
    off of obsolete inventory                   |  |                                | —          |                             
|Loss
    on impairment of property and equipment      |  |                                | —          |                             
|Total
    costs and expenses                          |  |                                | 553,108    |                             
|Operating
    loss                                    |  |                                | (177,334   | )                           
|Other
    (income) expense:                           |  |                                |            |                             
|Interest
    expense                                  |  |                                | 288,703    |                             
|(Gain)
    loss on disposal of property and equipment |  |                                | (45,420    | )                           
|Loss
    on extinguishment of debt                    |  |                                | —          |                             
|Loss
    before provision for income taxes            |  |                                | (420,617   | )                           
|Provision
    for state income taxes                  |  |                                | —          |                             
|Net
    loss                                          |  | $                              | (420,617   | )                           
|                                                      |  |                                |            |                             
|Net
    loss per common share - basic:                |  | $                              | (0.04      | )                           
|Net
    loss per common share - diluted:              |  | $                              | (0.04      | )                           
|                                                      |  |                                |            |                             
|Weighted
    Average Common Shares Outstanding:       |  |                                |            |                             
|Basic
    and Diluted                                 |  |                                | 11,629,143 |                             
|Diluted                                               |  |                                | 11,629,143 |                             



The
accompanying notes are an integral part of these consolidated financial statements.





F-2







FRONTIER
OILFIELD SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF CASH FLOWS



|                                                                                          |  | For
the Six Months Ended
|----------------------------------------------------------------------------------------- |  | ------------------------
|                                                                                          |  | June
30, 2016           
|Cash Flows From Operating Activities:                                                     |  |                         
|Net loss                                                                                  |  | $                       
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |                         
|Depreciation and amortization                                                             |  |                         
|Write off of obsolete inventory                                                           |  |                         
|Loss on impairment of property and equipment                                              |  |                         
|Gain on extinguishment of debt                                                            |  |                         
|Loss on disposal of property and equipment                                                |  |                         
|Amortization of capitalized loan fees                                                     |  |                         
|Stock compensation                                                                        |  |                         
|Changes in operating assets and liabilities:                                              |  |                         
|Decrease in operating assets:                                                             |  |                         
|Accounts receivable                                                                       |  |                         
|Other receivable                                                                          |  |                         
|Inventory                                                                                 |  |                         
|Deposits                                                                                  |  |                         
|Increase (decrease) in operating liabilities:                                             |  |                         
|Accounts payable                                                                          |  |                         
|Accrued liabilities                                                                       |  |                         
|Financed insurance premiums payable                                                       |  |                         
|Net cash provided by (used in) operating activities                                       |  |                         
|                                                                                          |  |                         
|Cash Flows From Investing Activities:                                                     |  |                         
|Repayment of advance to shareholder                                                       |  |                         
|Proceeds from disposition of CD                                                           |  |                         
|Proceeds from sale of property and equipment                                              |  |                         
|Net cash provided by investing activities                                                 |  |                         
|                                                                                          |  |                         
|Cash Flows From Financing Activities:                                                     |  |                         
|Payments on debt                                                                          |  |                         
|Net cash provided by (used in) financing activities                                       |  |                         
|                                                                                          |  |                         
|Net increase in cash                                                                      |  |                         
|Cash at beginning of the period                                                           |  |                         
|Cash at end of the period                                                                 |  | $                       
|                                                                                          |  |                         
|Supplemental
Cash Flow Disclosures                                                        |  |                         
|Interest paid                                                                             |  | $                       
|Taxes paid                                                                                |  | $                       
|                                                                                          |  |                         
|Supplemental
Schedule of Non-Cash Investing and Financing Activities                      |  |                         
|Conversion of preferred stock and cumulative dividend payable into common stock           |  | $                       
|Cumulative dividend payable recorded in accrued liabilities                               |  | $                       
|Settlement of accrued liabilities through stock issuance                                  |  | $                       



The
accompanying notes are an integral part of these consolidated financial statements.





F-3









FRONTIER
OILFIELD SERVICES, INC. AND SUBSIDIARIES



NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



JUNE
30, 2016



(Unaudited)



|1. | BASIS
OF PRESENTATION
|-- | ---------------------



The
consolidated financial statements included herein have been prepared by Frontier Oilfield Services, Inc. (“the Company”),
without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles
have been omitted. However, in the opinion of management, all adjustments (which include only normal recurring adjustments, unless
otherwise indicated) necessary to present fairly the financial position and results of operations for the periods presented have
been made. The results for interim periods are not necessarily indicative of trends or of results to be expected for the full
year. These financial statements should be read in conjunction with the financial statements of the Company for the year ended
December 31, 2015 (including the notes thereto) set forth in Form 10-K.



|2. | BUSINESS
ACTIVITIES
|-- | -------------------



Frontier
Oilfield Services, Inc. a Texas corporation (and collectively with its subsidiaries, “we”, “our”, “Frontier”,
“FOSI”, or the “Company”), was organized on March 24, 1995. The accompanying consolidated financial statements
include the accounts of the Company and Frontier Acquisition I, Inc., and its subsidiary Chico Coffman Tank Trucks, Inc. (CTT)
and its subsidiary Coffman Disposal, LLC, and Frontier Income and Growth, LLC (FIG) and its subsidiaries Trinity Disposal &
Trucking, LLC and Trinity Disposal Wells, LLC.



Frontier
operates its business in the oilfield service industry and is primarily involved in the disposal of saltwater and other oilfield
fluids in Texas. The Company currently owns and operates nine disposal wells in Texas, six within the Barnett Shale in North Texas
and three in east Texas near the Louisiana state line. The Company’s customers include national, integrated, and independent
oil and gas exploration companies.



|3. | GOING
CONCERN
|-- | -------------



The
Company’s financial statements are prepared using U.S. generally accepted accounting principles (“U.S. GAAP”)
applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course
of business. As of the date of the financial statements, the Company has generated losses from operations, has an accumulated
deficit and working capital deficiency. These factors raise substantial doubt regarding the Company’s ability to continue
as a going concern. As a result, our auditors issued an audit opinion with respect to our 2015 and 2014 annual financial statements
which included a statement describing our going concern status.



In
order to continue as a going concern and achieve a profitable level of operations, the Company will need, among other things,
to increase its business volume and grow revenues, reduce its operating expenses, raise additional capital resources and develop
new and stable sources of revenue sufficient to meet its operating expenses.



The
Company’s ability to continue as a going concern will be dependent upon management’s ability to successfully implement
management’s plans to pursue additional business volumes from new and existing customers, reduce indebtedness through sales
of non-performing assets and conversions of debt to equity, and rationalize the Company’s cost structure to achieve profitable
operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable
to continue as a going concern. The Company’s continued existence will ultimately be dependent on its ability to generate
sufficient cash flows to support its operations as well as provide sufficient resources to retire existing liabilities on a timely
basis. The Company faces significant risk in implementing its business plan and there can be no assurance that financing for its
operations and business plan will be available or, if available, such financing will be on satisfactory terms.





F-4







|4. | SUMMARY
OF SELECTED ACCOUNTING POLICIES
|-- | ---------------------------------------



Recently
Adopted Accounting Standards

In
April 2015, FASB issued an accounting pronouncement ASU 2015-3 related to the presentation of debt issuance costs (FASB ASC Subtopic
835-30). This standard will require debt issuance costs related to a recognized debt liability to be presented on the balance
sheet as a direct deduction from the debt liability rather than as an asset. These costs will continue to be amortized to interest
expense using the effective interest method. This pronouncement is effective for fiscal years, and for interim periods within
those fiscal years, beginning after December 15, 2015, and retrospective adoption is required. We have adopted this pronouncement
for our fiscal year beginning January 1, 2016. We do not expect this pronouncement to have a material effect on our consolidated
financial statements.



New
Accounting Pronouncements

In
May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers,which provides guidance on a single
comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The effective date for
this ASU, which was deferred by ASU 2015-14 issued in August 2015, is for fiscal years beginning after December 15, 2017. In March
2016, the FASB also issued ASU 2016-08, an amendment to the guidance in ASU 2014-09 which revises the structure of the indicators
to provide indicators of when the entity is the principal or agent in a revenue transaction, and eliminated two of the indicators
(“the entity’s consideration is in the form of a commission” and “the entity is not exposed to credit
risk”) in making that determination. This amendment also clarifies that each indicator may be more or less relevant to the
assessment depending on the terms and conditions of the contract. In April 2016, the FASB also issued ASU 2016-10, which clarifies
the implementation guidance on identifying promised goods or services and on determining whether an entity’s promise to
grant a license with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or
a right to access the entity’s intellectual property (which is satisfied over time). The amendments, collectively, should
be applied retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption.
Early adoption of the guidance is not permitted. The Company is currently evaluating the impact of adopting ASU 2014-09 and the
related updates to it on its financial position, results of operations and disclosures.



In
January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities,
which provides guidance for the recognition, measurement, presentation, and disclosure of financial assets and liabilities. The
guidance will be effective for the fiscal year beginning after December 15, 2017, including interim periods within that year.
The Company is in the process of evaluating the impacts of the adoption of this ASU.



In
February 2016, the FASB issued ASU 2016-02, Leases,which will, among other impacts, change the criteria under
which leases are identified and accounted for as on- or off-balance sheet. The guidance will be effective for the fiscal year
beginning after December 15, 2018, including interim periods within that year. Once effective, the new guidance must be applied
for all periods presented. The Company is in the process of evaluating the impacts of the adoption of this ASU.



In
March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting,which is intended
to simplify several aspects of the accounting for share-based payment award transactions. The guidance will be effective for the
fiscal year beginning after December 15, 2016, including interim periods within that year. The Company is in the process of evaluating
the impacts of the adoption of this ASU.



Principles
of Consolidation



The
consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant inter-company
transactions and balances have been eliminated in consolidation.



Fair
Value of Financial Instruments

In
accordance with the reporting requirements of ASC Topic 825, Financial Instruments, the Company calculates the fair
value of its assets and liabilities which qualify as financial instruments under this standard and includes this additional information
in the notes to the financial statements when the fair value is different than the carrying value of those financial instruments.
The Company does not have any assets or liabilities measured at fair value on a recurring basis, consequently, the Company did
not have any fair value adjustments for assets and liabilities measured at fair value at the balance sheet dates, nor gains or
losses reported in the statements of operations that are attributable to the change in unrealized gains or losses relating to
those assets and liabilities still held during the six months ended June 30, 2016 and 2015, except as disclosed.





Earnings
(Loss) Per Share (EPS)

Basic
earnings per common share are calculated by dividing net income or loss by the weighted average number of shares outstanding during
the period. Diluted earnings per common share are calculated by adjusting outstanding shares, assuming conversion of all potentially
dilutive stock options and warrants. The computation of diluted EPS does not assume conversion, exercise, or contingent issuance
of shares that would have an anti-dilutive effect on earnings per common share. Anti-dilution results from an increase in earnings
per share or reduction in loss per share from the inclusion of potentially dilutive shares in EPS calculations. Currently there
are no stock options in 2016, which have been excluded from EPS that could potentially have a dilutive effect on EPS in the future.
The table below sets forth the reconciliation for net loss and weighted average shares used for calculating basic and diluted
earnings per share.





F-5







|                                                       |  | Three
    Months Ended June 30, |            | Six
    Months Ended June 30,
|------------------------------------------------------ |  | ------------------------------- | ---------- | -----------------------------
|                                                       |  | 2016                            |            | 2015                         
|Earnings
    (numerator)                               |  |                                 |            |                              
|Net
    loss                                           |  | $                               | (420,617   | )                            
|Preferred
    stock dividends                          |  |                                 | —          |                              
|Net
    loss loss available to common shareholders     |  | $                               | (420,617   | )                            
|                                                       |  |                                 |            |                              
|Shares
    (denominator)                               |  |                                 |            |                              
|Weighted
    average common shares outstanding (basic) |  |                                 | 11,629,143 |                              
|                                                       |  |                                 |            |                              
|Loss
    per share from continuing operations          |  |                                 |            |                              
|Basic
    and Diluted                                  |  | $                               | (0.04      | )                            





|5. | STOCK
BASED COMPENSATION
|-- | ------------------------



The
Board of Directors of the Company elected to suspend all stock based compensation in 2015 as part of the Company’s cost
cutting and restructuring measures.



In
April 2016, the Board of Directors of the Company approved the issuance of an aggregate of 54,000 shares of common stock to the
members of the Board of Directors. The three members of the Board of Directors received 18,000 shares each.



|6. | BORROWINGS
|-- | ----------



Borrowings
as of June 30, 2016 and December 31, 2015 were as follows:





|                                                |  | June
    30, 2016 |            | December
    31, 2015
|----------------------------------------------- |  | ----------------- | ---------- | ---------------------
|                                                |  |                   |            |                      
|Revolving
    credit facility and term loan (a) |  | $                 | 1,339,462  |                      
|Term
    note (b)                               |  |                   | 4,330,820  |                      
|Loans
    from stockholders (c) (d)             |  |                   | 2,873,536  |                      
|Installment
    notes (e)                       |  |                   | 69,453     |                      
|Deferred
    loan fees (f)                      |  |                   | (279,822   | )                    
|Total
    debt                                  |  |                   | 8,333,449  |                      
|Less
    current portion                        |  |                   | (8,333,449 | )                    
|Total
    long-term debt                        |  | $                 | (0         | )                    



| | a. | The
Revolving Credit Facility and Term Loan (Senior Loan Facility) have a maturity date of July 23, 2017 and a default interest rate
which is the base rate plus the applicable margin plus 2% (6.75% and 7.75%, respectively as June 30, 2016, and December 31, 2015).
The term loan portion of the Senior Loan Facility requires monthly payments of $100,000 plus interest. The Senior Loan Facility
also provides for the payment of an unused commitment fee of .375% per annum. The loans are secured by all of the Company’s
properties and assets except for its disposal wells wherein the Senior Loan Facility has a subordinated secured position. On April
11, 2014 an accredited investor, who is also a significant stockholder in the Company, purchased the Senior Loan Facility and
related collateral from Capital One Bank N.A. and assumed all the existing terms and conditions of the Credit Agreement and Forbearance
Agreements. As of June 30, 2016, the Company was not in compliance with its debt covenants under the Senior Loan Facility and
the lender had not exercised its rights under the Senior Loan Facility. The outstanding balance of the Senior Loan Facility is
included in current liabilities at June 30, 2016 due to the fact that the Company was not in compliance with its debt covenants,
including the timely payment of interest and principal.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





F-6







| | b. | The
Company and its subsidiaries entered into a Term Loan, Guaranty and Security Agreement on July 23, 2012 with ICON in the amount
of $5 million (the “Loan Agreement”). On December 27, 2014 an affiliate of an accredited investor who is also a stockholder
purchased the note payable under the Loan Agreement. The accredited investor assumed the terms and conditions of the Loan Agreement.
The Loan Agreement provides for an annual interest rate of 14% with monthly payments of interest and with repayment of the principal
and all accrued but unpaid interest due on February 1, 2018. The Loan Agreement provides the lender with a senior secured position
on the Company’s disposal wells and a subordinated position to the Senior Loan Facility on all other Company properties
and assets. As of June 30, 2016, the Company was not in compliance with its debt covenants under the Loan Agreement and the lender
had not exercised its rights under the Loan Agreement. The outstanding balance of the note pursuant to the Loan Agreement is included
in current liabilities at June 30, 2016 due to the fact that the Company was not in compliance with its debt covenants, including
the timely payment of interest.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | c. | On
May 27, 2014 an accredited investor, who is also a stockholder in the Company, entered into a loan agreement with the Company
for the amount of $2,783,484. As of June 30, 2016 and December 31, 2015 the principal balance of the note was $2,786,536 and $2,786,536,
respectively. The note bears interest at 9% per annum. The terms of the note require the cash payment of one half of the interest
cost monthly (4.5% per annum), and the remaining half is accrued as payment in kind interest. The note and all accrued interest
were due and payable in November 27, 2015. The principal and interest on the note payable is past due according to its terms.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | d. | On
March 21, 2014 the CEO of the Company, who is also a stockholder in the Company entered into a promissory note agreement whereby
the CEO loaned the Company $87,000. The promissory note has an interest rate of 7% per annum. The note was to have been repaid
in installments throughout the year ended December 31, 2014 with a portion of the repayment conditioned upon the sale of certain
of the Company’s disposal wells. The principal and interest on the note payable to the CEO is past due according to its
terms.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | e. | The
Company has an installment loan with an outstanding principal balance of approximately $11,941 which was used to acquire property
and equipment for use in the Company’s operations. The collateral for the loan was no longer in use in the Company’s
operations and was returned to the lender May 2016. The reduction in principal from the surrender of the collateral was less than
the total balance owed. The remaining principal balance of the loan has been classified as a short-term liability.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | f. | Unamortized
debt issuance costs are amortized as interest expense over the terms of the related notes payable using the effective interest
method and are classified as a discount to the related recorded debt balance. Total interest expense on debt discount for the six months
ended June 30, 2016 and 2015 was $103,382 and $127,260, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      



|7. | COMMITMENTS
AND CONTINGENCIES
|-- | -----------------------------



| | a. | The
Company is obligated for approximately $1.3 million under long-term leases for the use of land where seven of its disposal wells
are located. Three of the leases are for extended periods of time. The first lease expires on February 7, 2023 (with two options
to renew for an additional 10 years each).The second lease expires on December 1, 2034 with no option to renew and the third lease
expires on May 31, 2018 with one year renewal options. The aggregate monthly lease payment for the disposal well leases is $10,985.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | b. | The
Company was a named defendant along with the previously named officers in certain litigation in the 271st Judicial District Wise
County, Texas wherein the Plaintiffs alleged they had been damaged by the failure of the Company to complete a disposal well in
a joint venture between the parties. On April 23, 2016, the litigation was settled by mutual agreement of the parties. Under the
terms of the settlement, the plaintiffs returned to the Company 53,000 shares of restricted and unregistered stock of the Company
issued to them in 2013. The Company issued 317,000 shares of restricted and unregistered shares of stock in the Company to the
plaintiffs. The Company will have exclusive trading authority over the shares issued to the plaintiffs and will have the right
of first refusal to purchase the shares upon any planned sale by the plaintiffs. The Company will also have a call option on the
shares which will entitle the Company to purchase the shares at $1.25 per share at any time. The settlement agreement resulted
in the termination of the litigation. As of December 31, 2015, the Company recorded a liability of $206,000 associated with
the settlement of this litigation.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | c. | From
time to time, the Company is a party to various legal actions arising in the ordinary course of business. The Company accrues
costs and legal costs associated with these matters when they become probable and the amount can be reasonably estimated. The
Company’s management does not expect any liability from the disposition of such claims and litigation individually or in
the aggregate would have a material adverse impact on the Company’s consolidated financial position, results of operations
and cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                



F-7









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



CAUTIONARY
STATEMENT



Statements
in this report which are not purely historical facts, including statements regarding the Company’s anticipations, beliefs,
expectations, hopes, intentions or strategies for the future, may be forward-looking statements within the meaning of Section 21E
of the Securities Act of 1934, as amended. All forward-looking statements in this report are based upon information available
to us on the date of the report. Any forward-looking statements involve risks and uncertainties that could cause actual results
or events to differ materially from events or results described in the forward-looking statements. Important factors with respect
to any such forward-looking statements, including certain risks and uncertainties that could cause actual results to differ materially
from the Company’s expectations (“Cautionary Statements”), are disclosed in the Company’s annual report
on Form 10-K, including, without limitation, in conjunction with the forward-looking statements under the caption “Risk
Factors.” In addition, important factors that could cause actual results to differ materially from those in the forward-looking
statements included herein include, but are not limited to, limited working capital, limited access to capital, changes from anticipated
levels of sales and revenues changes in the oil and gas markets especially in the oil field services markets and fluids disposal
business, future national or regional economic and competitive conditions, changes in relationships with customers, difficulties
in developing new business in the disposal business, difficulties integrating any new businesses or products acquired, replacing
the lost customer revenue, regulatory change, the ability of the Company to meet its stated business goals, the Company’s
restructuring initiatives, the Company’s ability to sustain profitability, the Company’s ability to service its debt,
its ability to comply with covenants contained in its financing arrangements, the current defaults existing under the Company’s
senior and subordinated credit arrangements, and general economic and business conditions. Although the Company believes the expectations
reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have
been correct. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its
behalf are expressly qualified in their entirety by the Cautionary Statements. We do not undertake to update any forward-looking
statements. Readers are cautioned not to place undue reliance on these forward-looking statements.



DESCRIPTION
OF PROPERTIES



Our
principal executive offices are located at 220 Travis St. Suite 501, Shreveport, Louisiana 71101.



We
own 7.055 acres at 503 W. Sherman St., Chico, Texas on which we have 3 buildings. These facilities serve as our executive and
administrative offices and headquarters for CTT operations including repair & maintenance facilities for its salt water disposal
services business. CTT has three operating wells near Chico, Texas. Two of these disposal well locations have small buildings
for well monitoring and operations. We also own 7.49 acres in Harrison County, Texas on which three of our disposal wells are
located, along with a small office and repair shop for the operation of these wells.



We
are obligated under long-term leases for the use of land where seven of our disposal wells are located. Three of the leases are
for extended periods of time. The first lease expires on February 7, 2023 (with two options to renew for an additional 10 years
each). The second lease expires on December 1, 2034 with a one-year renewal option and the third lease expires on May 31, 2018
with no option to renew. The aggregate monthly lease payments for the disposal well leases are $10,985.



SIGNIFICANT
ACCOUNTING POLICIES



A
summary of significant accounting policies is included in Note 3 to the audited consolidated financial statements included on
Form 10-K for the year ended December 31, 2015 as filed with the United States Securities and Exchange Commission. Management
believes that the application of these policies on a consistent basis enables the Company to provide useful and reliable financial
information about our operating results and financial condition.



The
preparation of financial statements in conformity with US Generally Accepted Accounting Principles 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. Actual
results may differ from those estimates.



RESULTS
OF OPERATIONS



For
the six months ended June 30, 2016 we reported a net loss of $1,011,667 as compared to a net loss of $152,118 for the six months
ended June 30, 2015. The components of these results are explained below.





3







Revenue-Total revenue decreased by $2.5 million, or 78% from $3.2 million for the six months ended June 30, 2015 to $700,000 for the
six months ended June 30, 2016. The decrease was due to Management’s decision to no longer provide transportation services
as a part of the services offered by the Company and to focus on the disposal business.



Expenses-The components of our costs and expenses for the three months ended June 30, 2016 and 2015 are as follows:





|                                                 |  | For
    the Six Months Ended |           | %                
|------------------------------------------------ |  | ---------------------------- | --------- | -----------------
|                                                 |  | June
    30, 2016            |           | June
    30, 2015
|Costs
    and expenses:                          |  |                              |           |                  
|Direct
    operating costs                       |  | $                            | 397,597   |                  
|Indirect
    operating costs                     |  |                              | 218,333   |                  
|General
    and administrative                   |  |                              | 360,273   |                  
|Depreciation
    and amortization                |  |                              | 230,643   |                  
|Write
    off of obsolete inventory              |  |                              | —         |                  
|Loss
    on impairment of property and equipment |  |                              | —         |                  
|                                                 |  |                              |           |                  
|Total
    cost and expenses                      |  | $                            | 1,206,846 |                  





The
decrease in the volumes of saltwater and other fluids transported and disposed of necessitated a decrease in operating expenses
for the six months ended June 30, 2016. The decrease in direct costs is primarily attributable to Management’s decision
to no longer provide transportation services as a part of the services offered by the Company and to focus on the disposal business.
This resulted in the reduction of the number of employees and the related salaries, wages and benefits as well as the elimination
of costs for fuel, repairs and maintenance for the truck fleet and the cost of the use of third party disposal wells.



The
decrease in indirect costs for the six months ended June 30, 2016, is the result of an overall reduction of administrative salaries
and benefits, insurance costs and utilities resulting from management’s decision to no longer provide transportation services
to customers.



Other
(Income) Expenses-Other (income)/expenses for the six months ended June 30, 2016 was approximately $570,000 of interest expense
and $(45,000) of gain on the disposal of assets; Other (income)/expenses of $(2.7) million for the six months ended June 30, 2015
included interest expense of $656,000; loss on disposal of property of $7,000 and a gain on extinguishment of debt of $3.4 million.



Operating
results for the six months ended June 30, 2016 reflect a net loss of $1,011,667. We have not recorded any federal income taxes
for the six months ended June 30, 2016 and 2015 because of our accumulated losses and our substantial net operating loss carry
forwards.



LIQUIDITY
AND CAPITAL RESOURCES



Cash
Flows and Liquidity

As
of June 30, 2016, we had total current assets of approximately $335,000. Our total current liabilities as of June 30, 2016 were
$12.7 million, including $8.3 million of debt classified as current liabilities. We had a working capital deficit of $12.4 millionas
of June 30, 2016 compared to a working capital deficit of $12 million as of December 31, 2015.



Management
is focused on working closely with our current lenders to fund operations through current cash flows, and pay interest costs when
excess cash becomes available. Management plans to work with our current lenders and debt holders to lower our cost of borrowing
by renegotiating the terms of our existing debt and potentially offering debt holders an opportunity to exchange their debt for
equity in the Company. Management will seek additional financing in those instances in which we believe such additional financings
will assist in accomplishing our goals. There can be no assurance that management’s plan will succeed.



Our
ability to obtain access to additional capital through third parties or other debt or equity financing arrangements is strictly
contingent upon our ability to locate adequate financing or equity investments on commercially reasonable terms. There can be
no assurance that we will be able to obtain such financing on acceptable terms.





4







The
following table summarizes our sources and uses of cash for the years ended June 30, 2016 and 2015:





|                                                        |  | For
    the Six Months Ended
|------------------------------------------------------- |  | ----------------------------
|                                                        |  | June
    30, 2016           
|Net
    cash provided by (used in) operating activities |  | $                           
|                                                        |  |                             
|Net
    cash provided by (used in) investing activities |  |                             
|                                                        |  |                             
|Net
    cash provided by (used in) financing activities |  |                             
|                                                        |  |                             
|Net
    increase (decrease) in cash                     |  | $                           



As
of June 30, 2016, we had approximately $49,000 in cash, an increase of approximately $26,000 from December 31, 2015 due to positive
cash flow from investing and financing activities.





Net
cash used in operating activities was approximately $235,000 for the six months ended June 30, 2016 due to operating loss. Net
cash provided by operating activities was approximately $555,000 for the six months ended June 30, 2015, due to improved profitability
and positive cash flow from operating activities.



Net
cash provided by investing activities was $294,000 for the six months ended June 30, 2016 due to repayment of an advance from
an entity owned by one of the principal shareholders of the Company as well as proceeds from the disposition of a certificate
of deposit. The cash advance is held in an investment account of the entity and is due on demand to the Company at any time. Net
cash provided by investing activities was $1,400 for the six months ended June 30, 2015.



Net
cash	 used in financing activities was approximately $32,000 for the six months ended June 30, 2016 which consisted of debt
repayments. Net cash used in financing activities was approximately $29,000 for the six months ended June 30, 2015, which also
consisted of debt repayments.



Capital
Expenditures



The
Company suspended capital expenditures during the six months ended June 30, 2016 due to the lower volumes disposed. The Company
does not currently anticipate any major capital expenditures for the remainder of 2016. The Company made the decision to no longer
provide transportation services to our customers which led to significant disposal activities on our transportation equipment
in 2015.



Indebtedness

On
April 11, 2014 an accredited investor, who is also a stockholder in the Company purchased the Capital One Note from Capital One
and assumed all the existing terms and conditions of the Senior Loan Facility including Capital One’s security interest
in the Company’s assets.



The
Company and its subsidiaries entered into a Term Loan, Guaranty and Security Agreement (the “Loan Agreement”) on July
23, 2012 with ICON for the amount of $5 million. The Loan Agreement has a senior secured position in the Company’s disposal
wells and a subordinated position to the Senior Loan Facility on all other Company properties and assets. The covenants in the
Loan Agreement are, in all material respects, the same as in the Senior Loan Facility. On December 27, 2014 an affiliate of an
accredited investor who is also a stockholder purchased the note payable associated with the Loan Agreement. The accredited investor
assumed the terms and conditions of the Loan Agreement.As of June 30, 2016, the Company was not in compliance with its
debt covenants under the Loan Agreement and the lender had not exercised their rights under the Loan Agreement. The outstanding
balance of the Loan Agreement note is included in current liabilities at June 30, 2016 due to the fact that the Company was not
in compliance with its debt covenants.



On
February 12, 2015, the Company executed a settlement agreement in litigation which had been asserted against certain officers
of the Company and for which the Company was obligated to indemnify such officers. The effect of the settlement agreement was
the cancellation of two subordinated promissory notes totaling $3,665,263. The settlement resulted in the reduction of the Company’s
indebtedness by $2,082,408. These promissory notes were owed to the former owners of CTT and related to the acquisition of CTT.
The settlement resulted in a one-time gain on extinguishment of debt of $2,082,408 in the three months ended March 31, 2015.





5







Outlook

Management
may seek to acquire other profitable oilfield service companies to broaden the Company’s customer base and capabilities.
Management believes that certain acquisitions could be potentially achieved through the issuance of the company’s equity
securities or through other financings. Management may need to incur additional financing in those instances in which we believe
such additional financings will assist in accomplishing our goals. There can be no assurance that management’s plan will
succeed.



ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



Not
required for smaller reporting companies.



ITEM 4.
CONTROLS AND PROCEDURES



Disclosure
Controls and Procedures

Our
management evaluated, with the participation of our Chief Executive Officer (CEO) and Chief Accounting Officer (CAO), 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 Securities
Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the quarter covered by this quarterly report
on Form 10-Q. In making this assessment, the Company used the criteria set forth by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on that evaluation, the Company’s
management, including the CEO, concluded that the Company’s internal controls over financial reporting were not effective
in that there was a material weakness as of June 30, 2016.



A
material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there
is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or
detected on a timely basis by the Company’s internal controls.



The
Company’s management has identified a material weakness in the effectiveness of internal control over financial reporting
related to a shortage of resources in the accounting department required to assure appropriate segregation of duties with employees
having appropriate accounting qualifications related to the Company’s unique industry accounting and disclosure rules. Management
has outsourced certain financial functions to mitigate the material weakness in internal control over financial reporting. The
Company is reviewing its finance and accounting staffing requirements.



Internal
Control Over Financial Reporting

There
have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f)
and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or
are reasonably likely to materially affect, the Company’s internal control over financial reporting. As a result, no corrective
actions were required or undertaken.



Limitations
on the Effectiveness of Controls

Our
management, including the CEO, does not expect that its disclosure controls or its internal controls will prevent all errors and
all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that
the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any,
within the company have been detected. These inherent limitations include the realities that judgments in decision-making can
be faulty, and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by the
individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any
system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become
inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because
of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.



PART
II. OTHER INFORMATION



Item 1.
LEGAL PROCEEDINGS



The
Company was a named defendant along with the previously named officers in certain litigation in the 271st Judicial District Wise
County, Texas wherein the Plaintiffs alleged they had been damaged by the failure of the Company to complete a disposal well in
a joint venture between the parties. On April 23, 2016, the litigation was settled by mutual agreement of the parties. Under the
terms of the settlement, the plaintiffs returned to the Company 53,000 shares of restricted and unregistered stock of the Company
issued to them in 2013. The Company issued 317,000 shares of restricted and unregistered shares of stock in the Company to the
plaintiffs. The Company will have exclusive trading authority over the shares issued to the plaintiffs and will have the right
of first refusal to purchase the shares upon any planned sale by the plaintiffs. The Company will also have a call option on the
shares which will entitle the Company to purchase the shares at $1.25 per share at any time. The settlement agreement resulted
in the termination of the litigation. As of December 31, 2015, the Company recorded a liability of $206,000 associated with
the settlement of this litigation.





6







Item 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS



Item 3.
DEFAULTS UPON SENIOR SECURITIES



The
outstanding principal balance of the Senior Loan Facility, the Loan Agreement and the two stockholder loans are included in current
liabilities at June 30, 2016 due to the fact that the Company was not in compliance with the debt covenants or payment terms on
the indebtedness, including the timely payment of interest and principal in accordance with all of these loan agreements. To date,
none of the holders of the Senior Loan Facility, the Loan Agreement or the two stockholder loans have declared that the Company
is in default or have otherwise sought remedies under the respective terms of these loan agreements.



Item 5.
OTHER INFORMATION



The
Board of Directors and management of the Company are currently evaluating transactions that may provide the Company with an opportunity
to improve its current financial condition including; (i) refinancing of all or a portion of our existing debt, (ii) the acquisition
of profitable oilfield service companies that could increase the scale of our operations and improve cash flows and (iii) raising
additional equity to pay down debt. There can be no assurance the Company will be successful in finding and closing any of the
above options.



Item 6.
EXHIBITS



| | (a) | EXHIBITS:
| | --- | ---------





31.1
Certification of Chief Executive Officer and Chief Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.



32.1
Certification of Chief Executive Officer/Chief Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.





101 	101.INS XBRL Instance Document

101.SCH XBRL Taxonomy Schema

101.CAL XBRL Taxonomy Calculation
Linkbase

101.LAB XBRL Taxonomy Label
Linkbase

101.PRE XBRL Taxonomy Presentation
Linkbase

101.DEF XBRL Taxonomy Definition
Linkbase



7







SIGNATURES



In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant has caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized, on August 15, 2016.







|FRONTIER
    OILFIELD SERVICES, INC. |                                                         
|------------------------------------ | --------------------------------------------------------
|                                     |                                                         
|SIGNATURE:                           | /s/
    Donald Ray Lawhorne                             
|                                     | Donald
    Ray Lawhorne,                                
|                                     | Chief
    Executive Officer and
Chief Accounting Officer



8