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Going Concern (Notes)
12 Months Ended
Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Going Concern
Going Concern

The Company is required to evaluate whether there is a substantial doubt about its ability to continue as a going concern each reporting period. In evaluating the Company’s ability to continue as a going concern, management has considered conditions and events that could raise substantial doubt about the Company’s ability to continue as a going concern for one year following the date the Company’s financial statements are issued. These conditions and evaluations included the Company’s current financial condition and liquidity sources, including current cash balances, forecasted cash flows, the Company’s obligations due within twelve months of the date of these financial statements, including the Company’s obligations described in Note 9 - Long-Term Debt, and the other conditions and events described below.
The Company has incurred substantial net losses and losses from operations for the years ended December 31, 2019 and 2018. As of December 31, 2019, the Company had cash and cash equivalents of approximately $5.2 million. The Company has access to a working capital facility that is based on the Company’s accounts receivable and, as of December 31, 2019, had $4.1 million available to borrow under such facility. The Company’s Revolving Loan is due January 2021, which is within the 12-month going concern evaluation period and in addition has covenant provisions that cause the Company to be in default due to the modification of its independent auditors opinion with the inclusion of the emphasis of matter paragraph related to going concern (“Going Concern Opinion”). This covenant violation in the Revolving Loan Agreement allows the loan to be due on demand. Current negotiations to extend the maturity date have not been successful however a waiver for the Going Concern Opinion was obtained providing relief of default from the covenant violation through June 30, 2020. There can be no assurance that the Company will be able to negotiate an extension on the Revolving Loan, obtain future waivers, or have sufficient funds to repay such obligations when they come due. As of December 31, 2019 the Company has $4.0 million outstanding under its Revolving Loan, which is recorded as a current liability. An additional uncertainty for the Company relates to the possibility that there will not be sufficient authorized common shares to fully convert the $58.6 million accrued amount of PIK notes. In addition, the Company may not have access to other sources of external capital on reasonable terms or at all. We also expect to continue to experience volatility in market demand which create normal oil and gas price fluctuations as well as external market pressures due to effects of global health concerns such as COVID-19 and the oil price war triggered by Russia and Saudi Arabia that are not within our control.
Management’s plans to alleviate substantial doubt include: (i) completing its merger as further discussed in Note 20 - Subsequent Events, although the merger has been approved by both Superior and the Company’s respective Board of Directors, the transaction has not been finalized as of the date of this filing pending formal shareholder approval and customary regulatory filings (ii) continuing to discuss amendments of its debt with the Company’s current lenders in order to extend the term of the Revolving Loan; (iii) continue negotiating with the note holders of the mandatorily convertible note as to the terms of the conversion and/or complete a shareholder vote to authorize more common shares available for issuance.(iv) continuing to manage operating costs by actively pursuing cost cutting measures to maximize liquidity in line with current industry economic expectations; and/or (v) pursuing additional financings with existing and new lenders. Based on the uncertainty of achieving these goals and the significance of the factors described, there is substantial doubt as to the Company’s ability to continue as a going concern for a period of one year after the date these financial statements are issued.