Going Concern	9 Months Ended
Sep. 30, 2017
Going Concern
Going Concern	NOTE 16—GOING CONCERN Our ABL Facility expires on the earlier of the instrument’s expiration date, March 14, 2022, or 90 days prior to the maturity date of the Senior Secured Notes due January 19, 2019 (i.e., October 17, 2018). Accordingly, our ABL Facility, which had $86.5 million of principal outstanding as of September 30, 2017, is due within one year of the date that our financial statements for the three months ended September 30, 2017 were issued. Further, during the nine months ended September 30, 2017, we incurred net losses of $58.0 million and net cash used in operating activities was $20.6 million. As of September 30, 2017, our total liquidity is $51.2 million. However, should we lose the ability to draw necessary funds under the ABL Facility or Factoring Facility due to the application of restrictive or financial covenants or an event of default, or if there is a contraction in trade terms from our suppliers due to concerns over our liquidity thereby requiring payment from Real Alloy in advance or on delivery of products or services, there is substantial doubt that our current liquidity would be sufficient for ongoing operations. In addition, the restrictive covenants in the Senior Secured Notes, ABL Facility and certain other indebtedness require us to maintain specified financial ratios and satisfy other financial conditions and tests. We are in compliance with these debt covenants as of September 30, 2017, however, given the circumstances above, our ability to meet those covenants going forward is subject to uncertainty. Our inability to comply with such covenants could result in the amounts outstanding under our debt to become immediately due. Without additional actions being implemented by management, as discussed below, a violation of certain of the debt covenants under the ABL Facility and the Senior Secured Notes is probable to occur in the next twelve months. As such, Real Alloy concluded that facts and circumstances would indicate the ABL Facility and the Senior Secured Notes warrant short-term classification as of September 30, 2017. In accordance with ASC 205-40, Presentation of Financial Statements – Going Concern, we performed an evaluation as to whether there is substantial doubt about our ability to continue as a going concern within one year after the date the financial statements for the three months ended September 30, 2017 are issued. Substantial doubt exists when relevant conditions and events, considered in the aggregate, indicate it is probable that an entity will be unable to meet its obligations as they become due within one year after the date the financial statements are issued. The initial evaluation of our ability to continue as a going concern does not take into consideration the potential mitigating effect of our plans that have not been fully implemented as of the date that the financial statements are issued. When substantial doubt exists, management evaluates whether the mitigating effects of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effects of management’s plans, however, is only considered if they are both probable of being effectively implemented within one year after the date the financial statements are issued, and probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued. In performing this evaluation, management concluded that the conditions described above raise substantial doubt about our ability to meet our financial obligations as they become due over the next year. A significant factor in mitigating the substantial doubt about our ability to continue as a going concern is our ability to restructure or refinance the Senior Secured Notes, obtain other bridge financing or recapitalize the Company through other means. Our mitigating plans, as announced on September 14, 2017, include engaging Jefferies LLC to assist in the refinancing effort. The refinancing team has met and entered into discussions with our current lenders and bondholders, as well as prospective lenders, investors, hedge funds, credit funds, and private equity firms regarding potential refinancing, bridge financing and recapitalization of the Company through other means, but the terms of a transaction have not yet been agreed upon. While we believe that our plans could alleviate the substantial doubt, there can be no assurance an agreement with respect to a refinancing transaction or other recapitalization will be finalized in a timely manner, or at all. Such plans cannot be considered as mitigating events under the accounting guidance. As such, management has concluded that there is substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements for the three months ended September 30, 2017 are issued.

NOTE 16—GOING CONCERN

Our ABL Facility expires on the earlier of the instrument’s expiration date, March 14, 2022, or 90 days prior to the maturity date of the Senior Secured Notes due January 19, 2019 (i.e., October 17, 2018). Accordingly, our ABL Facility, which had $86.5 million of principal outstanding as of September 30, 2017, is due within one year of the date that our financial statements for the three months ended September 30, 2017 were issued.

Further, during the nine months ended September 30, 2017, we incurred net losses of $58.0 million and net cash used in operating activities was $20.6 million. As of September 30, 2017, our total liquidity is $51.2 million. However, should we lose the ability to draw necessary funds under the ABL Facility or Factoring Facility due to the application of restrictive or financial covenants or an event of default, or if there is a contraction in trade terms from our suppliers due to concerns over our liquidity thereby requiring payment from Real Alloy in advance or on delivery of products or services, there is substantial doubt that our current liquidity would be sufficient for ongoing operations. In addition, the restrictive covenants in the Senior Secured Notes, ABL Facility and certain other indebtedness require us to maintain specified financial ratios and satisfy other financial conditions and tests. We are in compliance with these debt covenants as of September 30, 2017, however, given the circumstances above, our ability to meet those covenants going forward is subject to uncertainty. Our inability to comply with such covenants could result in the amounts outstanding under our debt to become immediately due. Without additional actions being implemented by management, as discussed below, a violation of certain of the debt covenants under the ABL Facility and the Senior Secured Notes is probable to occur in the next twelve months. As such, Real Alloy concluded that facts and circumstances would indicate the ABL Facility and the Senior Secured Notes warrant short-term classification as of September 30, 2017.

In accordance with ASC 205-40, Presentation of Financial Statements – Going Concern, we performed an evaluation as to whether there is substantial doubt about our ability to continue as a going concern within one year after the date the financial statements for the three months ended September 30, 2017 are issued. Substantial doubt exists when relevant conditions and events, considered in the aggregate, indicate it is probable that an entity will be unable to meet its obligations as they become due within one year after the date the financial statements are issued. The initial evaluation of our ability to continue as a going concern does not take into consideration the potential mitigating effect of our plans that have not been fully implemented as of the date that the financial statements are issued. When substantial doubt exists, management evaluates whether the mitigating effects of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effects of management’s plans, however, is only considered if they are both probable of being effectively implemented within one year after the date the financial statements are issued, and probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued.

In performing this evaluation, management concluded that the conditions described above raise substantial doubt about our ability to meet our financial obligations as they become due over the next year. A significant factor in mitigating the substantial doubt about our ability to continue as a going concern is our ability to restructure or refinance the Senior Secured Notes, obtain other bridge financing or recapitalize the Company through other means. Our mitigating plans, as announced on September 14, 2017, include engaging Jefferies LLC to assist in the refinancing effort. The refinancing team has met and entered into discussions with our current lenders and bondholders, as well as prospective lenders, investors, hedge funds, credit funds, and private equity firms regarding potential refinancing, bridge financing and recapitalization of the Company through other means, but the terms of a transaction have not yet been agreed upon. While we believe that our plans could alleviate the substantial doubt, there can be no assurance an agreement with respect to a refinancing transaction or other recapitalization will be finalized in a timely manner, or at all. Such plans cannot be considered as mitigating events under the accounting guidance. As such, management has concluded that there is substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements for the three months ended September 30, 2017 are issued.