| HELD-FOR-SALE |
HELD-FOR-SALE MoGas Pipeline and Omega Pipeline Systems
As of September 30, 2023, the Company's MoGas and Omega pipeline systems were classified as assets and liabilities held-for-sale. The Company is disposing of these assets to address upcoming debt maturities on the Crimson Credit Facility and to reduce outstanding debt associated with the Company's 5.875% Unsecured Convertible Senior Notes due 2025.
On May 25, 2023, the Company announced entry into a definitive agreement to sell the MoGas and Omega pipeline systems to Spire, Inc. for $175.0 million in cash, subject to final working capital adjustments. On July 3, 2023, the Company received a request for additional information ("Second Request") from the FTC with regard to this proposed acquisition. The Company is fully cooperating with the FTC regarding the Second Request and expects to close around the end of the calendar year subject to receiving FTC approval.
The pre-tax profit from the disposal group held for sale is summarized in the table below for each period the statement of operations is presented:
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For the Three Months Ended |
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For the Nine Months Ended |
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September 30, 2023 |
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September 30, 2022 |
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September 30, 2023 |
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September 30, 2022 |
Pre-tax profit(1)
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$ |
1,150,591 |
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$ |
(616,079) |
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$ |
3,000,379 |
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$ |
3,601,156 |
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| Allocated interest related to the sale to repay the Crimson Credit Facility |
2,601,032 |
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1,584,924 |
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7,635,380 |
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4,278,117 |
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| (1) The Company is contractually obligated to use the proceeds from the anticipated sale to repay the Crimson Credit Facility. As such, the aforementioned pre-tax profit includes allocated interest related to the sale and repayment of the Crimson Credit Facility. |
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Held-for-Sale Balance Sheet
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September 30, 2023 |
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| Assets |
(Unaudited) |
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Property and equipment, net of accumulated depreciation of $30,077,502 |
$ |
99,237,947 |
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Leased property, net of accumulated depreciation of $309,778 |
1,216,249 |
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Cash and cash equivalents (1)
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6,194,608 |
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| Accounts and other receivables |
2,579,532 |
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| Inventory |
145,950 |
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| Prepaid expenses and other assets |
868,585 |
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| Operating right-of-use assets |
63,550 |
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| Total Assets |
$ |
110,306,421 |
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| Liabilities |
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| Accounts payable and other accrued liabilities |
1,410,475 |
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| Operating lease liability |
35,800 |
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Deferred tax liability, net(2)
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655,151 |
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| Unearned revenue |
5,059,367 |
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| Total Liabilities |
$ |
7,160,793 |
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(1) The Company has elected to disclose 100% of the disposal group cash and cash equivalent balance as held for sale, however, the Company only expects a minimal amount of cash necessary for day-to-day operations will ultimately be transferred in the sale. |
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(2) The deferred tax liability is recorded within certain parent entities that are not part of the disposal group, however, because the liability was generated from the operations of the disposal group, the Company has included it within liabilities held-for-sale on the Consolidated Balance Sheet. |
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