BASIS OF PRESENTATION AND LIQUIDITY
|12 Months Ended|
Dec. 31, 2019
|Notes to Financial Statements|
|BASIS OF PRESENTATION AND LIQUIDITY||
NOTE B — BASIS OF PRESENTATION AND LIQUIDITY
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying consolidated financial statements, the Company incurred losses from continuing operations applicable to its common shareholders of $11.8 million, $8.0 million, $1.2 million, and $0.5 million, during the years ended December 31, 2019, 2018, 2017 and 2016, respectively, and has an accumulated deficit applicable to its common stockholders of $55.7 million, at December 31, 2019. The Company incurred operating losses of $4.9 million, $2.1 million, $0.9 million, and $0.9 million, during the years ended December 31, 2019, 2018, 2017 and 2016, respectively. At December 31, 2019, the Company had negative working capital of $33.0 million and a stockholders’ deficit applicable to its stockholders of $24.5 million.
On May 4, 2020, a group of lenders agreed to provide a $300 million senior secured term loan facility to one of Global Clean Energy Holdings, Inc.’s subsidiaries to enable that subsidiary to acquire the equity interests of Bakersfield Renewable Fuels, LLC and to pay the costs of the retooling of the refinery owned by Bakersfield Renewable Fuels, LLC. Concurrently with the senior credit facility, a group of mezzanine lenders have agreed to provide a $65 million secured term loan facility to be used to pay the costs of repurposing and starting up the Bakersfield biorefinery. See, “Note J Subsequent Events.” Although the funds provided by the senior and mezzanine lenders may only be used for the Bakersfield refinery and servicing these debt obligations, since the Company shares facilities and personnel, Global Clean Energy Holdings, Inc. will realize a reduction in certain of its operating expenses. As of October 6, 2020, the Company believes that these cost savings, plus the Company’s other financial resources should be sufficient to fund the Company’s operations for the next eighteen months from the date that the accompanying financial statements were available to be issued.
In April of 2019, the Company executed a binding Product Offtake Agreement (the “Offtake Agreement”) with a major oil company (“Purchaser”) pursuant to which Purchaser has committed to purchase approximately 2.5 million barrels of renewable diesel annually from the Bakersfield Biorefinery, and the Company will be obligated to sell these quantities of renewable diesel to Purchaser. Purchaser’s obligation to purchase renewable diesel will last for a period of five years following the date that the Bakersfield Biorefinery commences operations. Purchaser has the option to extend the initial five-year term by an additional five years. Either party may terminate the Offtake Agreement if the Bakersfield Biorefinery does not meet certain production levels by certain milestone dates following the commencement of the Bakersfield Biorefinery’s operations.
No definition available.
No definition available.