Long-Term Debt and Notes Payable

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Long-Term Debt and Notes Payable

4. Long-Term Debt and Notes Payable

The Company is a party to an Amended and Restated Credit Agreement (the “Credit Agreement”), with the Supporting Lenders.  The Bankruptcy Petitions constituted an event of default that accelerated the Debtor’s obligations under the Credit Agreement.  However, under the Bankruptcy Code, the Supporting Lenders are stayed from taking any action against the Debtors as a result of this event of default.  The Credit Agreement has $65,000 in aggregate principal amount of borrowings outstanding thereunder, which borrowings bear interest at 9.00% and are guaranteed by AGPI and StrataGen. The Credit Agreement originally matured on December 31, 2022, however as a result of the event of default, the Company reclassified long-term debt, net of $62,501 to current liabilities as of December 31, 2019.  In May 2019, the Company repaid $14,533 to Wilks as a result of the required prepayment relating to the net cash proceeds from the sale of its Millen, Georgia facility.  On June 20, 2019, the Company entered into the Second Amendment to Amended and Restated Credit Agreement and Joinder (the “Amended Credit Agreement”) with Wilks and Equify Financial, LLC, an affiliate of Wilks, (“Equify”). By amending the previous credit agreement, the Company was able to re-borrow the amount that was repaid in May 2019, such that the total outstanding principal remains at $65,000, but the Company’s repayment obligations are now split between Wilks and Equify, at $33,150 and $31,850, respectively.   In January 2020, the Company made its regularly scheduled cash interest payments of $1,504 and $1,445 to Wilks and Equify, respectively.

If borrowings under the Credit Agreement are repaid before March 31, 2021 the Company must make the lenders whole for interest that would have been payable over the entire remaining term of the loan.  This make-whole payment is due in certain other instances, including acceleration of the loan due to an event of default caused by the Company filing for bankruptcy protection.  As of December 31, 2019 and 2018, no amounts were recorded relating to this clause.  The Company’s obligations under the Amended Credit Agreement are secured by: (i) a pledge of all accounts receivable and inventory, (ii) cash in certain accounts, (iii) domestic distribution assets residing on owned real property, (iv) the Company’s Marshfield, Wisconsin and Toomsboro, Georgia plant facilities and equipment, and (v) certain real property interests in mines and minerals.  

As of December 31, 2019, the Company’s combined outstanding debt to Wilks and Equify under the Amended Credit Agreement and Equify Note was $65,000.  As of December 31, 2019, as a result of the collateral associated with it, the fair value of the Company’s long-term debt approximated the carrying value.

On each of January 31, 2020 and February 27, 2020, the Company, Wilks and Equify entered into a waiver, pursuant to which, the Lenders waived any default or event of default arising in connection with the non-payment by the Company of certain obligations unrelated to the outstanding debt to Wilks and Equify.

As of December 31, 2019, the Company had $580 of unamortized debt issuance costs relating to the Credit Agreement and Amended Credit Agreement that are presented as a direct reduction from the carrying amount of the long-term debt obligation.  As a result of the May 2019 repayment, the Company wrote off approximately $137 of unamortized debt issuance costs relating to the Credit Agreement.  As a result of the June 2019 refinancing, the Company recorded approximately $218 of debt issuance costs resulting from an amendment fee paid directly to Wilks.  The Company had $7,889 and $2,625 in standby letters of credit issued through its banks as of December 31, 2019 and December 31, 2018, respectively, primarily as collateral relating to railcar leases and other obligations.

On March 2, 2017, in connection with entry into the Credit Agreement, the Company issued a Warrant (the “Warrant”) to Wilks.  Subject to the terms of the Warrant, the Warrant entitled the holder thereof to purchase up to 523,022 shares of the Common Stock, at an exercise price of $14.91 per share, payable in cash.  The Warrant was amended in connection with the Amended Credit Agreement and June 2019 refinancing to revise the exercise price to $4.00 and to extend the expiration date to December 31, 2024.   Based on a Form 13D filing with the SEC on July 9, 2019 as of June 20, 2019, Wilks owned approximately 10.5% of the Company’s outstanding common stock as of December 31, 2019, and should Wilks fully exercise the Warrant to purchase an additional 523,022 shares, Wilks would hold approximately 12.1% of the Company’s outstanding common stock.  Upon issuance of the Warrant, the Company recorded an increase to additional paid-in capital of $3,871.  Upon modification of the Warrant, the Company recorded an increase to additional paid-in capital of $178.  As a result of the May 2019 repayment, the Company wrote off approximately $609 of unamortized original issue discount.  As of December 31, 2019, the unamortized original issue discount was $1,919.

In May 2016, the Company received proceeds of $25,000 from the issuance of separate unsecured Promissory Notes (the “Notes”) to two of the Company’s Directors.  Each Note matured on April 1, 2019 and bore interest at 7.00%.  On March 2, 2017, in connection with the Credit Agreement, the Notes were amended to provide for payment-in-kind, or PIK, interest payments at 8.00% until the lenders under the Amended Credit Agreement receive two consecutive semi-annual cash interest payments.  On April 1, 2017, the Company made a $997 interest payment as PIK, and capitalized the resulting amount to the outstanding principal balance.  On October 1, 2017, the Company made a $1,043 interest payment as PIK, and capitalized the resulting amount to the outstanding principal balance.  On April 1, 2019, the Company made a $27,040 payment repaying the outstanding principal balance of the Notes.

Interest cost for the years ended December 31, 2019 and 2018 was $7,821 and $8,612, respectively.  Interest cost primarily includes interest expense relating to the Company’s debts as well as amortization and the write-off of debt issuance costs and amortization of the original issue discount associated with the Amended Credit Agreement and Warrant.

The Company also holds certain notes payable with aggregate outstanding balances as of December 31, 2019 of $4,955.  These notes payable relate primarily to notes executed during 2019 resulting from the sale of its facility in Millen, Georgia on December 31, 2018, as well as financed insurance premiums and a land purchase in 2019.  The Bankruptcy Petitions constituted an event of default that accelerated the Debtor’s obligations under these notes payable. As a result of the event of default, the Company reclassified long-term debt of $3,356 to other current liabilities as of December 31, 2019.  See Note 17 for additional terms of these notes payable.

As of December 31, 2019, contractual maturities for the Company’s long-term debt and notes payable (recorded within long-term debt, current portion, net and other current liabilities of the consolidated balance sheet) for each of the ensuing years through December 31, 2025 is approximately $1,599, $995, $65,943, $855, $347 and $216, respectively