TARGET HOSPITALITY CORP. Item 8.01 Other Events. Relief for Form 10-Q Filing
The impact caused by the global outbreak of novel coronavirus ("COVID-19"), the
declaration of a pandemic by the
Risk Factors
In addition, the Company is supplementing the risk factors previously disclosed
in "Item 1A. Risk Factors" of the Company's Annual Report on Form 10-K for the
year ended
The recent outbreak of COVID-19 and certain developments in the global oil markets have had, and may continue to have, material adverse consequences for general economic, financial and business conditions, and could materially and adversely affect our business, financial condition, results of operations and liquidity and those of our customers.
The recent outbreak of COVID-19 has had and will continue to have, repercussions
across local, national and global economies and financial markets. As a result,
there has been a decline in the demand for, and thus also the market prices of,
oil and natural gas and other products of many of our customers. These declines
have been exacerbated by the production dispute between
Concerns over the negative effects of COVID-19 on economic and business prospects across the world have contributed to increased market and oil price volatility and have diminished expectations for the global economy. These factors, coupled with the emergence of decreasing business and consumer confidence and increasing unemployment resulting from the COVID-19 outbreak and the recent abrupt oil price decline, may precipitate a prolonged economic slowdown and recession. Any such prolonged period of economic slowdown or recession, or a protracted period of depressed prices for our oil and gas customer's products, could have significant adverse consequences for our customers' financial condition and subsequently, our financial condition and could diminish our liquidity.
The effects of COVID-19 and the developments in the global oil markets could adversely impact our and our customers' ability to successfully operate due to, among other factors:
? a general decline in business activity and demand which would adversely affect
both our and our customers' operations as well as our ability to grow;
? difficulty accessing debt and equity capital on attractive terms, or at all,
and a severe disruption and instability in the global financial markets or
deteriorations in credit and financing conditions may affect our or our
customers' ability to access capital necessary to fund business operations or
affect our ability to make physical improvements to our communities, on a
timely basis, and may adversely affect the valuation of financial assets and
liabilities, any of which could affect our ability to meet liquidity and
capital expenditure requirements or have a material adverse effect on our
business, financial condition, results of operations and cash flows?
? the declaration of bankruptcy by one or more of our customers; and
? a deterioration in our and our customers' ability to operate or operate in
affected areas resulting in our having to temporarily close or consolidate some
of our communities, or delays in the supply of products or services from our
and our customers' vendors that are needed for us and our customers to operate
effectively.
These factors may impact our customers' ability or willingness to pay or to renew their multi-year contracts, or cause our customers to try to renegotiate their agreements with us, which may impact our revenues. These factors may also require us to incur additional expenses that are not otherwise anticipated. The extent of this impact on our income and expenses may have a material adverse effect on our ability to continue to fund our operations and service our indebtedness. Further, the worsening of our estimated future cash flows with respect to one or more communities adversely impacted by the effects of the COVID-19 pandemic, coupled with ongoing market and oil price volatility, could result in the recognition of substantial impairment charges with respect to the affected assets, which could adversely impact our financial results.
The full extent of the adverse impact of COVID-19 on our business, financial
condition, liquidity and results of operations cannot be predicted and has been
and may continue to be material. The magnitude will depend on factors beyond our
control including actions taken by local, state, national and international
governments, non-governmental organizations, the medical community, our
customers, and others. Moreover, risk factors set forth in our Annual Report on
Form 10-K for the year ended
Cautionary Statement Regarding Forward Looking Statements
Certain statements made in this Current Report on Form 8-K are "forward looking
statements" within the meaning of the "safe harbor" provisions of the United
States Private Securities Litigation Reform Act of 1995. When used in this press
release, the words "estimates," "projected," "expects," "anticipates,"
"forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should,"
"future," "propose" and variations of these words or similar expressions (or the
negative versions of such words or expressions) are intended to identify
forward- looking statements. These forward-looking statements are not guarantees
of future performance, conditions or results, and involve a number of known and
unknown risks, uncertainties, assumptions and other important factors, many of
which are outside our control, that could cause actual results or outcomes to
differ materially from those discussed in the forward-looking statements.
Important factors, among others, that may affect actual results or outcomes
include: the severity and duration of the COVID-19 pandemic, related economic
repercussions and the resulting negative impact on demand for oil and natural
gas; operational challenges relating to the COVID-19 pandemic and efforts to
mitigate the spread of the virus, including logistical challenges, protecting
the health and well-being of our employees and customers, remote work
arrangements, contract and supply chain disruptions; continued customer demand
and activity levels in the
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