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Subsequent Events
12 Months Ended
Dec. 31, 2018
Subsequent Events [Abstract]  
Subsequent Events

NOTE 12. SUBSEQUENT EVENTS

 

In February 2019, the Company entered into a $4.3 million financing agreement comprised of a $0.8 million term loan and a $3.5 million asset-based revolving credit facility. The interest rate for the term loan and the revolver is prime plus 2%. The obligations of the borrowers, which includes the Company and its subsidiaries, under the agreement are secured by a security interest in substantially all of the tangible and intangible assets of the borrowers, other than any assets owned by the borrowers that constitute real property (and fixtures affixed to such real property), certain excluded equipment, intellectual property, or aircraft. The credit facility matures on February 20, 2023, subject to early termination pursuant to the terms of the agreement or extension as may be agreed by the parties.

 

Also in February 2019, the Company filed a patent infringement lawsuit in the United States District Court for the Western District of Louisiana Lafayette Division asserting Stabil Drill infringed on our patent that covers the Company’s well bore conditioning tool, the Drill-N-Ream. Stabil Drill has not yet responded to the lawsuit. As of the date of this annual report, the lawsuit is in initial stages. We cannot predict the outcome of this matter, but our legal costs could have a material effect on our financial position or results of operations in future periods.

 

In June 2019, the Company entered into two financing agreement to purchase equipment. The Company made a down payment of $291,578 and recorded a current liability of $272,000 that is due to the financing company. The Company is obligated to pay 1% a month on the outstanding balance. The financing loans will be finalized once the equipment is delivered later in the year.  In August 2019, the Company decided not to purchase one piece of equipment and we will refund the down payment to the financing company. We don’t anticipate any penalties from canceling the equipment order or financing agreement.

 

On July 30, 2019, the Board of Directors granted 125,000 restricted stock units to Chris Cashion, Chief Financial Officer, and 78,125 restricted stock units to each of the three independent members of the Board of Directors. These restricted stock units will vest over three years. In addition, the Board of Directors approved grants of restricted stock units to Troy and Annette Meier with an approximate value of $587,500. The Board and the Meiers decided in lieu of making such awards, the dollar value of such awards would be used to pay $327,238 on the Tronco Note and the remaining $260,262 will be remitted for taxes on the Meiers behalf.

 

In August 2019, the Company accepted an offer to sale its airplane hangar. The Company expects to finalize the sale in the third quarter of 2019 for a $6,000 loss.