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Basis of Presentation (Policies)
9 Months Ended
Sep. 30, 2017
Accounting Policies [Abstract]  
Deferred Taxes - Valuation Allowance

Deferred Taxes – Valuation Allowance

Accounting Standards Codification (“ASC”) Topic 740, Income Taxes, provides the carrying value of deferred tax assets should be reduced by the amount not expected to be realized.  A company should reduce deferred tax assets by a valuation allowance if, based on the weight of all available evidence, it is not more likely than not that some portion or all of the deferred tax assets will be realized.  The valuation allowance should be sufficient to reduce the deferred tax asset to the amount that is more likely than not to be realized.  ASC 740 requires all available evidence, both positive and negative, be considered to determine whether a valuation allowance for deferred tax assets is needed in the financial statements.  Additionally there can be statutory limitations and losses also assessed on the deferred tax assets should certain conditions arise.  As a result of the significant decline in oil and gas activities and net losses incurred over the several quarters  prior to the first quarter of 2017, we determined during the three months ended March 31, 2017 that it was more likely than not that a portion of our deferred tax assets will not be realized in the future.  Our valuation allowance against a portion of our deferred taxes as of September 30, 2017 was $30,624.  Our assessment of the realizability of our deferred tax assets is based on the weight of all available evidence, both positive and negative, including future reversals of deferred tax liabilities.

Restricted Cash

Restricted Cash

As a result of the repayment of the Wells Fargo term loan, combined with the continued use of letters of credit and corporate cards with Wells Fargo (see Note 8), a portion of the Company’s cash balance is now restricted to its use in order to provide collateral to Wells Fargo.  As of September 30, 2017 and December 31, 2016, restricted cash was $10,216 and $0, respectively.

Lower of Cost or Market Adjustments

Lower of Cost or Market Adjustments

As of September 30, 2017, the Company reviewed the carrying values of all inventories and concluded that no adjustments were warranted for finished goods and raw materials intended for use in the Company’s manufacturing process.  As of September 30, 2016, the Company reviewed the carrying values of all inventories and concluded that certain sand inventories were impacted by changes in market conditions.   Consequently, during the nine-month period ended September 30, 2016, the Company recognized a $115 loss in cost of sales to adjust the carrying value to the lower market prices on certain sand inventories.  

Manufacturing Production Levels Below Normal Capacity

Manufacturing Production Levels Below Normal Capacity

As a result of the Company substantially reducing manufacturing production levels, including by idling certain facilities, certain production costs have been expensed instead of being capitalized into inventory.  The Company expenses fixed production overhead amounts in excess of amounts that would have been allocated to each unit of production at normal production levels.  For the three months ended September 30, 2017 and 2016, the Company expensed $10,890 and $12,845, respectively, in production costs.  For the nine months ended September 30, 2017 and 2016, the Company expensed $32,899 and $36,067, respectively, in production costs.

Long-lived and other noncurrent assets impairment

Long-lived and other noncurrent assets impairment

As noted, throughout 2017 and 2016, the Company has temporarily idled production at various manufacturing facilities.  The Company does not assess temporarily idled assets for impairment unless events or circumstances indicate that the carrying amounts of those assets may not be recoverable.  Short-term stoppages of production for less than one year do not generally significantly impact the long-term expected cash flows of the idled facility.  At December 31, 2016, as a result of the continued severity of the market downturn, the Company identified indicators of impairments related to each of its domestic manufacturing plant asset groups.  The Company completed undiscounted cash flow analyses on that date and determined no impairment charge was necessary at that time.  As of September 30, 2017, the Company concluded that the Company’s Toomsboro and Millen, Georgia facilities should no longer be evaluated together as a group of assets because the facilities are no longer interchangeable and will not manufacture like products.  As a result of the sustained and long-term shift away from base ceramic proppant to less expensive frac sand, the Company has made a strategic decision to focus on growing technology, industrial and mineral processing revenue streams.  Our Toomsboro, Georgia plant is being repurposed to produce technology and industrial products, as well as for use in toll processing of minerals.  Our Millen, Georgia facility is currently only able to produce base ceramic proppants, but given our current long-term outlook on base ceramic proppant demand, we do not expect to utilize this plant to produce base ceramic proppant.  We are currently evaluating opportunities to monetize our assets at our Millen facility.  As a result, we evaluated the Toomsboro and Millen, Georgia plants separately for indicators of impairment during the third quarter of 2017.

Given the change in the asset groupings of the two facilities and lack of estimated future cash flows associated with the base ceramic production at the Millen facility, the Company identified indicators of impairment at the Millen, Georgia facility as of September 30, 2017.  The Company determined that the projected cash flows attributable to our Millen, Georgia facility did not exceed the carrying value of the assets; therefore the Company concluded there was an impairment at that facility.  The Company engaged the services of a third party consulting firm to assist with the determination of the fair market value of the related assets and concluded that the assets were impaired.  The key assumptions and inputs impacting the fair value include third party market data with respect to the property and equipment at our Millen facility as well as at comparable facilities.  For machinery and equipment and construction in progress, we used a combination of the cost and market approaches to estimate our valuation.  We applied a 65 percent downward adjustment to book cost based on an analysis of construction documents and historical expenditures to remove non-saleable soft costs such as engineering and installation that would have no secondary market value.  Based on discussions with market participants, a salvage value multiplier ranging from 12 percent to 50 percent of the remaining cost basis was applied to arrive at estimated fair value for the assets subject to impairment.  For real property, the value of comparable buildings ranged from approximately $30 to $40 per square foot, and the concluded value of the buildings at the Millen facility was approximately $35 per square foot.  As a result, the Company recognized a $125,759 impairment of long-lived assets, primarily relating to machinery and equipment and construction in progress.  As of September 30, 2017, related to the other asset groups, there were no events or circumstances that would indicate that carrying amounts of long-lived and other noncurrent assets might be impaired given that results for the first nine months of 2017 generally met our expectations from our analysis as of December 31, 2016 and given that our future outlook of cash flows associated with those asset groups has not significantly changed since that date.