Going concern assessment

Liquidity by month to one year past issuance, every covenant tested, each plan weighed before it counts. Conclusion, note and MD&A wording, every figure tied

Customize this Agent

DOCXXLSX16 steps

The problem

Debt due October 2027: noncurrent at September 30, inside this quarter's going concern window

ASC 205-40 counts the year from the day the 10-Q is issued, not quarter end, so a maturity twelve and a half months after quarter end is inside it. A refinancing removes the doubt only when probable of closing and of mitigating. Viskase extended its facility a year, to August 2027, and still disclosed substantial doubt; Sable Offshore closed its refinancing July 2 and called the doubt alleviated

The request

Q3 is closed and we file the 10-Q on November 5. Run Basalt's going concern assessment. We're a listed industrial packaging maker, $410 million revenue, calendar year. Our $165 million first lien term loan matures October 15, 2027, so it enters the window this quarter, and the ABL has a springing fixed charge coverage test. The refinancing term sheet is still in negotiation. Build the liquidity forecast monthly to one year past issuance, with interest on today's curve, the borrowing base, every covenant test and a downside. Conclude without the refinancing first, then whether it's probable of closing and of mitigating. Memo with the conclusion, note and MD&A liquidity wording, benchmarked to peers' June 10-Qs. Files attached.

Basalt term loan and ABL agreements with amendments.pdf
Basalt refinancing term sheet Oct26.pdf
Basalt monthly forecast Oct26 to Dec27.xlsx
Basalt borrowing base certificate Sep26.xlsx
Basalt trial balance Sep26.xlsx
Basalt Q2 going concern memo.docx

How Axe works

ApprovedChanges asked

Your reviewApprove, or say what to change

Approved or changes

Memo and liquidity forecastMemo, forecast and tie out report

Final reviewApprove the revised files

Revised memo and liquidity forecastRevised files and tie out

Step

Build the liquidity forecast

Prompt

Sent to the model at this step

Build the liquidity forecast by month from October 2026 to the month the window ends, before any plan. Open with cash, debt, accrued interest and letters of credit at September 30, tied to the trial balance, and availability from the September borrowing base certificate. Count as liquidity only cash the business can use: deduct the operating cash it needs and any cash that cannot reach the borrower without cost or delay. Take operating receipts, payments, capital spending and working capital from our monthly forecast, stripped of the interest, debt service and revolver draws it carries, which this model computes once. Test the forecast against its record: set the quarter the Q2 memo forecast against the actuals in the trial balance and adjust any line that missed, logging each change. Leave out every mitigating action not fully implemented by the filing date, as ASC 205-40-50-4 requires: the refinancing, asset sales, new equity, cost programs and deferred capital spending. Roll the borrowing base each month from forecast receivables and inventory at the agreement's advance rates, eligibility and reserves, capped at the commitment, less loans and letters of credit, and set excess availability against the level that springs the fixed charge test. Fund any monthly deficit from the ABL up to availability and repay it from surplus cash. Price interest at each reset on the CME Term SOFR forward curve at the latest close, with each facility's margin, floor and unused fee, paid on the dates the agreements set. Put the term loan's principal and interest due October 15, 2027 and the ABL at its stated or springing maturity in the month each falls. Show each month's ending cash, availability, total liquidity and any shortfall against the obligations due. Then run a downside from the same opening position: volumes 10 percent below forecast, raw material costs 10 percent higher and passed to customers a quarter late, collections five days slower and the curve 50 basis points higher, carried through the borrowing base, interest and cash.

Uses

Matter
Filing date
Monthly forecast
Borrowing base certificate
Trial balance
Prior memo
Debt terms
Window

Produces

Liquidity forecast

What you get back

DOCXGoing concern memoConclusion, window, conditions and events, plans weighed, note, MD&A and risk factor wording

XLSXLiquidity forecastWindow, monthly cash and availability in two cases, covenant tests, defaults and plan case

Tie out reportOpen items first, then each figure and citation marked tied or corrected

Make it yours

Point it at your own facilities and filing date, set your downside, or use your memo template and peer set. Every step and every prompt can be edited

Customize this Agent

Opens a private copy of this Agent in your workspace, ready to adapt to your own sources

More agent examples

Corporate accounting teamsFlux analysisXLSXDOCX14 steps

Financial reporting teamsGoodwill impairment testXLSXDOCX16 steps

Valuation advisorsPurchase price allocationXLSXDOCX16 steps

Technical accounting teamsTechnical accounting memoDOCXXLSX15 steps

Capital markets analystsBroker opinion of valuePPTXXLSX16 steps