Business Context and Reporting Period
Company: Energy Services of America Corporation
Filing Type: Form 8-K (Current Report)
Date of Report: September 6, 2013
Reporting Period: Event-based report regarding an amendment to a material definitive agreement.
Key Financial Metrics
This filing does not provide standard financial performance metrics such as revenue, profit, cash flow, margins, or total debt levels. The document focuses exclusively on the terms of a debt forbearance agreement.
Material Changes and Events
The Company and its subsidiaries (collectively, the "Obligors") are in default under two credit facilities with United Bank, Inc. On September 6, 2013, the parties entered into an amendment to a previously existing forbearance agreement (originally dated November 28, 2012). Key changes include:
- Extension of Capital Raise Timeline: The amendment extends the period during which the Company must raise funds.
- Capital Raise Structure: Establishes specific tranches for the capital and cash components of the required capital raise.
- Payment Obligation: Requires the Company to pay the greater of $1.0 million or 50% of the amount collected on a third-party claim currently under arbitration.
Outlook, Risks, and Contingencies
Arbitration Contingency: The Company is pursuing a claim against a third party that is currently being arbitrated. The filing explicitly states there can be no assurance of whether or when the arbitration will be settled in the Company's favor. The outcome of this arbitration directly impacts the Company's ability to meet the new payment obligation to United Bank, Inc.
Default Status: The Company remains in default under its credit facilities, relying on the bank's forbearance from exercising rights and remedies.
Investor Verification Checklist
- Verify the status and potential value of the third-party claim currently under arbitration.
- Review the full text of the Amendment to Forbearance Agreement (Exhibit 10.1) for specific tranche deadlines and default triggers.
- Confirm the Company's current progress on the required capital raise.
- Assess the Company's liquidity position given the requirement to pay up to $1.0 million or 50% of arbitration proceeds.