|6 Months Ended|
Jun. 30, 2020
|Liquidity Risk [Abstract]|
Our operations are based on a small number of large sales. As a result, our cash flow and therefore our current assets and working capital may vary widely during the year based on the timing of those sales. Virtually all our past sales were under term contracts which specify delivery quantities, sales prices and payment dates. As a result, we performed cash management functions over the course of an entire year and were less reliant on current commodity prices and market conditions. As our remaining term contracts were completed in 2020 Q2, we have become more dependent on current commodity prices until we are able to enter into new term contracts.
As at June 30, 2020, the Company’s financial liabilities consisted of trade accounts payable and accrued trade and payroll liabilities of $0.7 million which are due within normal trade terms of generally to 60 days, notes payable of $13.3 million, and asset retirement obligations with estimated settlement dates until 2033.
The payment schedule for the $12.4 million State Bond Loan was modified on October 1, 2019 to defer principal payments for eighteen months (see note 10). As at July 31, 2020, quarterly principal payments are scheduled to resume on April 1, 2021, with two payments falling due within the 12 months from the as at date.
On April 16, 2020, we received $0.9 million under the U.S. Small Business Administration (“SBA”) Payroll Protection Program (“PPP”), which was created under the Coronavirus Aid, Relief and Economic Security
Act (the “CARES Act”). We anticipate the loans will meet the requirements for forgiveness under this program (see note 10).
On July 31, 2020, the Company announced a $4.68 million registered direct offering of 9,000,000 common shares and accompanying one-half common share warrants to purchase up to 4,500,000 common shares, at a combined public offering price of $0.52 per common share and accompanying warrant, with gross proceeds to the Company of $4.68 million. After estimated fees and expenses of approximately $0.4 million, net proceeds to the Company are expected to be $4.3 million, which are expected to be received on or about August 4, 2020. See note 17 – Subsequent Event for discussion of the offering.
In addition to our cash position and expected registered direct offering net proceeds, our finished, ready-to-sell, conversion facility inventory is immediately realizable, if necessary. While our current cash position should be sufficient to cover our expected expenditures for the remainder of the year, we anticipate selling a significant portion of our existing finished-product inventory in 2021 at market prices in effect at that time, unless market conditions change, or we choose to obtain additional financing.