For the three and six months ended June 30, 2019March 31, 2020

For the three and six months ended June 30, 2018March 31, 2019

Forbes Energy Services Ltd., or FES Ltd., is an independent oilfield services contractor that provides a wide range of well site services to oil and natural gas drilling and producing companies to help develop and enhance the production of oil and natural gas. These services include fluid hauling, fluid disposal, well maintenance, completion services, workovers and recompletions, plugging and abandonment, tubing testing, fluid hauling and tubing testing.fluid disposal. The Company's operations are concentrated in the major onshore oil and natural gas producing regions of Texas, with an additional location in Pennsylvania. The Company believes that itsoffers a broad range of services, which extends from initial drilling, through production, to eventual abandonment is fundamental to establishing and maintaining the flow of oil and natural gas throughout the life cycle of our customers’ wells.

As used in these condensed consolidated financial statements, the “Company”, “we” and “our” mean FES Ltd. and its subsidiaries, except as otherwise indicated.

As an independent oilfield services contractor that provides a broad range of drilling-related and production-related services to oil and natural gas companies, primarily onshore in Texas, the Company's revenue, profitability, cash flows and future rate of growth are substantially dependent on itsthe Company's ability to (1) maintain adequate equipment utilization, (2) maintain adequate pricing for the services itthe Company provides, and (3) maintain a trained workforce. Failure to do so could adversely affect the Company's financial position, results of operations, and cash flows.

Because the Company's revenues are generated primarily from customers who are subject to the same factors asgenerally impacting the Company,oil and natural gas industry, the Company's operations are also susceptible to market volatility resulting from economic, seasonal and cyclical, weather related, or other factors related to such industry. The Company is subject to changes in the level of operating and capital spending in the industry, decreases in oil and natural gas prices, and/or industry perception about future oil and natural gas prices that may materially decrease the demand for the Company's services, or may have an adverse effect on ouradversely affecting its financial position, results of operations and cash flows.

The unaudited condensed consolidated financial statements of the Company are prepared in conformity with accounting principles generally accepted in the United States of America, or GAAP, for interim financial reporting. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Therefore, these condensed

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated balance sheets and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.

Fair value is the price that would be received to sell an asset, or the amount paid to transfer a liability in an orderly transaction between market participants (an exit price) at the measurement date.

There is a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The Company classifies fair value balances based on the observability of those inputs. The three levels of the fair value hierarchy are as follows:

In valuing certain assets and liabilities, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. For disclosure purposes, assets and liabilities are classified in their entirety in the fair value hierarchy level based on the lowest level of input that is significant to the overall fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy levels.

The carrying amounts of cash and cash equivalents, accounts receivable-trade, accounts receivable-other, accounts payable-trade and insurance notes approximate fair value because of the short maturity of these instruments. The fair values of finance leases approximate their carrying values based on current market rates at which the Company could borrow funds with similar maturities (Level 2 in the fair value hierarchy). The fair valuesvalue of the Term Loan Agreement Bridge Loan and the PIK Notes as of the respective dates are set forth below (in thousands):

The following table provides a reconciliation of cash, cash equivalents and cash - restricted reported within the condensed consolidated balance sheets to the same such amounts shown in the condensed consolidated statements of cash flows (in thousands).

Revenue is measured as consideration specified in a contract with a customer and excludes any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by providing service to a customer. Amounts are billed upon completion of service and are generally due within 30 days.

The Company has its principal revenue generating activities organized into three service lines, well servicing, coiled tubing and fluid logistics. The Company's well servicing line consists primarily of maintenance, workover, completion, plugging and abandonment, and tubing testing services. The Company's coiled tubing line consists of maintenance, workover and completion services. The Company's fluid logistics line provides supporting services to the well servicing line as well as direct sales to customers for fluid management and movement. The Company generally establishes a master services agreement with each customer and provides associated services on a work order basis in increments of days, by the hour for services performed or on occasion, bid/turnkey pricing. Services provided under the well servicing, coiled tubing and the fluid logistics segments are short in duration and generally completed within 30 days.

The majority of the Company’s contracts with customers in the well servicing, coiled tubing and fluid logistics segments are short-term in nature and are recognized as “over-time” performance obligations as the services are performed. The Company applies the “as-invoiced” practical expedient as the amount of consideration the Company has a right to invoice corresponds directly with the value of the Company’s performance to date. Because of the short-term nature of the Company’s services, which generally last a few hours to multiple days, the Company does not have any contracts with a duration longer than one year that require disclosure. The Company has no material contract assets or liabilities.

The Company does not have any revenue expected to be recognized in the future related to remaining performance obligations or contracts with variable consideration related to undelivered performance obligations. There was no revenue recognized in the current period from performance obligations satisfied in previous periods. The Company's significant judgments made in connection with the adoption of ASCAccounting Standards Codification ("ASC") 606 included the determination of when the Company satisfies its performance obligation to customers and the applicability of the as invoiced practical expedient.

The Company adopted this standardis required to evaluate whether there is a substantial doubt about its ability to continue as a going concern each reporting period. In evaluating the Company’s ability to continue as a going concern, management has considered conditions and events that could raise substantial doubt about the Company’s ability to continue as a going concern for one year following the date the Company’s financial statements are issued. These conditions and evaluations included the Company’s current financial condition and liquidity sources, including current cash and cash equivalents balances, forecasted cash flows, the Company’s obligations due within twelve months of the date these financial statements were issued, including the Company’s obligations described in Note 7 - Long-Term Debt, and the other conditions and events described below.

The Company has incurred substantial net losses and losses from operations for the quarter ended March 31, 2020 and for the year ended December 31, 2019. As of March 31, 2020, the Company had cash and cash equivalents of approximately $8.1 million. The Company has a working capital facility under the Revolving Loan Agreement (as described below) that is based on the Company’s accounts receivable; however, as of March 31, 2020, the Company did not have funds available to borrow under the Revolving Loan Agreement. Loans under the Revolving Loan Agreement mature in January 2021 and loans under the Term Loan Agreement mature in April 2021, in each case within the 12-month going concern evaluation period. In March 2020, a prospective basis usinglimited waiver was obtained under the optional modified retrospective transition method.Revolving Loan Agreement, providing relief extending through June 30, 2020, from the requirement to provide an unqualified opinion on the Company’s consolidated financial statements for the fiscal year ended December 31, 2019. There can be no assurance that the Company will be able to negotiate an extension of the Revolving Loan, obtain future waivers, or have sufficient funds to repay its obligations under the Revolving Loan Agreement when they come due. As such,of March 31, 2020, the comparative financial informationCompany had $4.0 million of loans outstanding under the Revolving Loan Agreement, which is recorded as a current liability. In addition, the PIK Notes became mandatorily convertible into common stock upon maturity on June 30, 2020, provided, however, each of Ascribe Capital LLC and Solace Capital Partners LP, on behalf of each of their funds that is a holder of PIK Notes issued under the Indenture which in the aggregate hold $48.9 million of face value of the PIK Notes, agreed to extend the maturity date under the Indenture to November 30, 2020 of the Excess PIK Notes (as defined below). The Company does not

Management’s plans to alleviate this substantial doubt include: (i) continuing to discuss amendments with athe Company’s lenders to seek to extend the term of 12 months the Revolving Loan Agreement and the Term Loan Agreement; (ii) negotiate with the holders of the mandatorily convertible PIK Notes as to the terms of the conversion and/or less are not recognizedcomplete a shareholder vote to authorize more common shares available for issuance; (iii) continuing to manage operating costs by actively pursuing cost cutting measures to maximize liquidity in line with current industry economic expectations; and/or (iv) pursuing additional financings with existing and new lenders. Based on the balance sheet. The adoptionuncertainty of this standard resulted inachieving these goals and the recognitionsignificance of approximately $6.2 millionthe factors described, there is substantial doubt as to the Company’s ability to continue as a going concern for a period of operating lease right-of-use assets and operating lease liabilities onone year after the balance sheet as of January 1, 2019. The adoption of this standard did not materially impact the condensed consolidateddate these financial statements of operations for the three and six months ended June 30, 2019. See Note 8 for the expanded lease disclosures required by the new standard.are issued.

These market conditions have significantly impacted the Company's business and outlook with material adverse impacts to operations anticipated to continue in the near-term. Customers continue to revise their capital budgets in order to adjust spending levels in response to the lower commodity prices, and the Company acquired 100%has experienced, and continues to experience, significant customer activity reductions and pricing pressure for products and services. The Company has determined these recent events constituted a triggering event that required a review of the outstanding unitsrecoverability of Cretic Energy Services, LLC (Cretic). The acquisition of Cretic was accounted for as a business combination using the acquisition method of accounting. The aggregate purchase price was $69.4 million in cash (net of $2.2 million cash acquired).

The fair value of long-lived assets was determined based on a discounted cash flow analysis. These analyses included significant judgment, including management’s short-term and long-term forecast of operating performance, discount rates based on weighted average cost of capital, revenue growth rates, profitability margins, capital expenditures, the nettiming of future cash flows based on an eventual recovery of the oil and gas industry, and in the case of long-lived assets, acquired. The goodwill recorded was primarily attributablethe remaining useful life and service potential of the assets. These impairment assessments incorporate inherent uncertainties, including projected commodity pricing, supply and demand for services and future market conditions, which are difficult to synergies related to the Company’s coiled tubing business strategy that are expected to arisepredict in volatile economic environments and could result in impairment charges in future periods if actual results materially differ from the Cretic acquisition andestimated assumptions utilized in forecasts.

Based upon the Company's impairment assessments, it was attributable todetermined the Company’s coiled tubing segment.

The pro forma amounts do not include any potential synergies, cost savings or other expected benefitsfollowing table presents the components of the Cretic acquisition, andimpairment write down, which are presented for illustrative purposes only and are not necessarily indicativereflected on the consolidated statement of results that would have been achieved if the Cretic acquisition had occurred as of January 1, 2018 or of future operating performance. operations (in thousands):

Property and equipment consisted of the following (in thousands):

Depreciation expense was $6.7$5.7 million and $7.4$9.0 million for the three months ended June 30,March 31, 2020 and 2019, and 2018, respectively, and $15.7 million and $14.2 million for the six months ended June 30, 2019 and 2018, respectively. Depreciation of assets held under finance leases was $1.1 million and $0.7$1.2 million for the three months ended June 30,March 31, 2020 and 2019, and 2018, respectively, and $2.3 million and $1.4 million for the six months ended June 30, 2019 and 2018, respectively, and is included in depreciation and amortization expense in the accompanying condensed consolidated statements of operations. Gains that resulted from the sale of property and equipment was $0.3 million and $1.1 million for the three months ended March 31, 2020 and 2019, respectively, which are included as direct operating costs. Impairment expense related to property and equipment totaled $40.0 million for the three months ended March 31, 2020.

The following table sets forth the identified other intangible assets by major asset class (in thousands):

AmortizationImpairment expense was $0.3 million and $0.3related to intangible assets totaled $(3.9) million for the three months ended June 30, 2019 and 2018, respectively, and $0.8March 31, 2020. Amortization expense was $0.4 million and $0.6$0.4 million for the sixthree months ended June 30,March 31, 2020 and 2019, and 2018, respectively.

Future amortization of these intangiblesintangible assets for the remaining periods through December 31 will be as follows:

On April 13, 2017, FES LLC, as borrower, and the Company and certain of its subsidiaries, as guarantors, entered into the Term Loan Agreement. FES LLC isand Security Agreement (the "Term Loan Agreement") with the borrower, or the Borrower, under the Termlenders party thereto and Wilmington Trust, National Association, as agent (the “Term Loan Agreement. The Borrower’s obligations have been guaranteed by FES Ltd. and by TES, CCF and FEI, each direct subsidiaries of the Borrower and indirect subsidiaries of FES Ltd.Agent”). The Term Loan Agreement, as amended, providesprovided for a term loan of $60.0 million, excluding paid in kindpaid-in-kind interest. Subject to certain exceptions and permitted encumbrances, the obligations under the Term Loan Agreement are secured by a first priority security interest in substantially all the assets of the Company other than accounts receivable, cash and related assets, which constitute priority collateral under the Revolving Loan Agreement (described below). The Term Loan Agreement has a stated maturity date of April 13, 2021.

Borrowings under the Term Loan Agreement bear interest at a rate equal to five percent (5%) per annum payable quarterly in cash, or the Cash Interest Rate, plus (ii) an initial paid in kindpaid-in-kind interest rate of seven percent (7%) commencing April 13, 2017 to be capitalized and added to the principal amount of the term loan or, at the election of the Borrower, paid in cash. The paid in kindpaid-in-kind interest increases by two percent (2%) twelve months after April 13, 2017 and every twelve months thereafter until maturity. Upon and after the occurrence of an event of default, the Cash Interest Rate will increase by two percentage points per annum. During the sixthree months ended June 30, 2019, $2.9March 31, 2020, $1.7 million of interest was paid in kind.paid-in-kind. At June 30, 2019,March 31, 2020, the paid in kindpaid-in-kind interest rate was 11%.

The Term Loan Agreement includes customary negative covenants for an asset-based term loan, including covenants limiting the ability of the Company to, among other things, (i) effect mergers and consolidations, (ii) sell assets, (iii) create or suffer to

In connection with the Cretic Acquisition, onOn November 16, 2018, the Company and certain of its subsidiaries, as borrowers, entered into a Credit Agreement (the “Revolving Loan Agreement”) with the lenders party thereto and Regions Bank, as administrative agent and collateral agent (the “Revolver Agent”). The Revolving Loan Agreement, as amended, provides for $35$9.0 million of revolving loanletter of credit commitments, subject to a borrowing base comprised of 85% of eligible accounts receivable, 90% of eligible investment grade accounts receivable (in each case, less allowance for doubtful accounts) and 100% of eligible cash, less reserves. The loansletter of credit commitments under the Revolving Loan Agreement expire in December 2020, and letter of credit issued under the Revolving Loan Agreement, accrue interestfees at a floating rate of LIBOR plus 2.50% - 3.25%, or a base rate plus 1.50% - 2.25%, with the margin based on the fixed charge coverage ratio from time to time.4.25% per annum.

The Revolving Loan Agreement is secured on a first lien basis by substantially all assets of the Company and its subsidiaries, subject to an intercreditor agreement between the Revolver Agent and the Term Loan Agent which provides that the priority collateral for the Revolving Loan Agreement consists of accounts receivable, cash and related assets, and that the other assets of the Company and its subsidiaries constitute priority collateral for the Term Loan Agreement. At March 31, 2020, the Company had $4.0 million of borrowings outstanding, and $6.9 million in letters of credit outstanding. At June 30, 2019 we2020, the Company had $6.0 millionno revolving loans outstanding or available borrowings outstanding, $6.1and $6.9 million in letters of credit outstanding, with $2.1 million in available commitments.

On February 3, 2020 the Company and certain of its subsidiaries, as borrowers, entered into the Second Amendment to Credit Agreement, effective December 31, 2019, (the “February 2020 Revolving Loan Amendment”), with the lenders party thereto and the Revolver Agent. Among other things, the February 2020 Revolving Loan Amendment reinstated a minimum excess line availability covenant for the monthly periods from December 2019 through July 2020 and removed the requirement to test for the purpose of $9.9 million.a financial covenant, the fixed charge coverage ratio for the monthly periods from December 2019 through June 2020.

On March 4, 2019, the Company issued $51.8 million aggregate original principal amount of 5.00% Subordinated Convertible PIK Notes due June 30, 2020 (the “PIK Notes”). On March 4, 2019, the Company, as Issuer, and Wilmington Trust, National Association, as Trustee, entered into an Indenture governing the terms of the PIK Notes.

The PIK Notes bear interest at a rate of 5.00% per annum. Interest on the PIK Notes will be accrued and payable, or capitalized to principal if not permitted to be paid in cash, semi-annually in arrears on July 1June 30 and January 1December 31 of each year, commencing

The PIK Notes are the unsecured general subordinated obligations of the Company and are subordinated in right of payment to any existing and future secured or unsecured senior debt of the Company.Company, including debt incurred under the Term Loan Agreement and the Revolving Loan Agreement. The payment of the principal of, premium, if any, and interest on the PIK Notes will be subordinated to the prior payment in full of all of the Company’s existing and future senior

The Indenture also provides that upon a default by the Company in the payment when due of principal of, or premium, if any, or interest on, indebtedness in the aggregate principal amount then outstanding of $5.0 million or more, or acceleration of the Company’s indebtedness so that it becomes due and payable before the date on which it would otherwise have become due and payable, and if such default is not cured or waived within 30 days after notice to the Company by the Trusteetrustee or by holders of at least 25% in aggregate principal amount of the PIK Notes then outstanding, the principal of, (and premium, if any) and accrued and unpaid interest on, the PIK Notes may be declared immediately due and payable.

The PIK Notes are redeemable in whole or from time to time in part at the Company’s option at a redemption price equal to the sum of (i) 100.0% of the principal amount of the PIK Notes to be redeemed and (ii) accrued and unpaid interest thereon to, but excluding, the redemption date, which amounts may be payable in cash or in shares of the Company’s common stock, (subject to limitations, if any, in the documentation governing the Company’s senior indebtedness). If redeemed for the Company’s common stock the holder will receive a number of shares of the Company’s common stock calculated based on the Fair Market Value of a share of the Company’s common stock at such time, in each case less a 15% discount per share. The 15% discount represents an implied conversion premium at issuance which will be settled in common stock at the date of conversion.  As such, the face value of the PIK Notes will be accreted to the settlement amount at June 30, 2020.  For the three and six months ended June 30,March 31, 2020 and 2019, the Company recorded $1.8 million and $2.4$0.6 million, respectively, in interest expense related to the accretion of the conversion premium.

The Indenture contains provisions permitting the Company and the trustee in certain circumstances, without the consent of the holders of the PIK Notes, and in certain other circumstances, with the consent of the holders of not less than a majority in aggregate principal amount of the PIK Notes at the time outstanding to execute supplemental indentures modifying the terms of the Indenture and the PIK Notes as described Itdescribed. The Indenture also provided in the Indentureprovides that, subject to certain exceptions, the holders of a majority in aggregate principal amount of the PIK Notes at the time outstanding may on behalf of the holders of all the PIK Notes waive any past default or event of default under the Indenture and its consequences.

The Indenture provides for mandatory conversion of the PIK Notes at maturity (or such earlier date as the Company shall elect to redeem the PIK Notes), or upon a Marketed Public Offeringmarketed public offering of the Company’s common stock or a Change of Control, in each case as defined in the Indenture, at a conversion rate per $100 principal amount of PIK Notes into a number of shares of the Company’s common stock calculated based on the Fair Market Value of a share of the Company’s common stock at such time, in each case less a 15% discount per share.

Fair Market Value means fair market value as determined by (A) in the case of a Marketed Public Offering,marketed public offering, the offering price per share paid by public investors in the Marketed Public Offering,such marketed public offering, (B) in the case of a Change of Control, the value of the consideration paid per share by the acquirer in the Change of Control transaction, or (C) in the case of mandatory conversion at the Maturity Date (or such earlier date as the Company shall elect to redeem the PIK Notes), such value as shall be determined by a nationally recognized investment banking firm engaged by the Board of Directors of the Company.

The Company usedEffective November 14, 2019, each of Ascribe Capital LLC and Solace Capital Partners LP, on behalf of each of their funds that is a holder of PIK Notes issued under the gross proceedsIndenture which in the aggregate hold $48.9 million of $51.8 million that it received from the issuanceface value of the PIK Notes, agreed to repay allextend the maturity date under the Indenture to November 30, 2020 of those PIK Notes (the "Excess PIK Notes"), for which there are not at June 30, 2020 sufficient authorized shares of common stock of the outstanding principal andCompany to effect the mandatory conversion of the Excess PIK Notes, after giving effect to the conversion of PIK Notes held by other holders of PIK Notes who have not agreed to a maturity date extension or conversion deferral.  Each also agreed to defer the mandatory conversion feature under the Indenture for such Excess PIK Notes until after the Company’s stockholders have authorized sufficient additional shares of the Company’s common stock to permit such conversion.

On June 29, 2020, the Company notified the PIK Note holders of a possible default due to property tax penalties that have been accrued and unpaid interest on the Bridge Loan.are outstanding, as further described in Note 17 - Subsequent Events.

TheDuring 2019 and 2018, the Company entered into insurance promissory notes for the payment of insurance premiums at an interest rate of 4.99% and 3.27% respectively, with an aggregate principal amount outstanding of approximately $1.0$2.8 million and $5.2$4.5 million as of June 30, 2019March 31, 2020 and December 31, 2018,2019, respectively. The amount outstanding could be substantially offset by the cancellation of the related insurance coverage which is classified in prepaid insurance. These notes are or were payable in nine monthly installments with maturity dates of August 15, 2020 and July 15, 2019, respectively.

Financial instruments which subject the Company to credit risk consist primarily of cash balances maintained in excess of federal depository insurance limits and trade receivables. Insurance coverage is currently $250,000 per depositor at each financial institution, and the Company's non-interest bearing cash balances exceeded federally insured limits. The Company restricts investment of temporary cash investments to financial institutions with high credit standings.

The Company’s customer base consists primarily of multi-national and independent oil and natural gas producers. The Company does not require collateral on its trade receivables. For the sixthree months ended June 30, 2019,March 31, 2020, the Company's largest customer, five largest customers, and ten largest customers constituted 10.0%13.4%, 33.8%37.9% and 46.5%52.2% of consolidated revenues, respectively. The loss of any one of the Company's top five customers could have a materially adverse effect on the revenues and profits of the Company. Further, the Company's trade accounts receivable are from companies within the oil and natural gas industry and as such the Company is exposed to normal industry credit risks. As of June 30, 2019,March 31, 2020, the Company's largest customer, five largest customers, and ten largest customers constituted 4.8%6.2%, 27.0%27.9% and 44.2%39.8% of accounts receivable, respectively.

The Company’s largest five customers includes Chesapeake Energy who on June 28, 2020 filed for Chapter 11 Bankruptcy.  The Company’s payments received from Chesapeake Energy are subject to analysis for preference as is customary in bankruptcy proceedings.  As of the date of this filing there has been no indication of outcome from this analysis or communication from the bankruptcy proceedings, as such the outcome of Chesapeake Energy’s Bankruptcy and its effects on the Company is uncertain. The Company continually evaluates its reserves for potential credit losses and establishes reserves for such losses.

The Company has a 401(k) retirement plan for substantially all of its employees based on certain eligibility requirements. The Company may provide profit sharing contributions to the plan at the discretion of management. No such discretionary contributions have been made since inception of the plan.

The Company is subject to various other claims and legal actions that arise in the ordinary course of business. The Company does not believe that any of the currently existing claims and actions, separately or in the aggregate, will have a material adverse effect on the Company's business, financial condition, results of operations, or cash flows. It is reasonably possible that cases could be resolved and result in liabilities that exceed the amounts currently reserved; however, wethe Company cannot reasonably estimate a range of loss based on the status of the cases. If one or more negative outcomes were to occur relative to these matters, the aggregate impact to the Company’s financial condition could be material.

The Company is self-insured under its Employee Group Medical Plan for the first $150 thousand per individual. The

As of March 31, 2020, the Company is self-insured withhas a retentionper occurrence $2.0 million deductible for the first $250 thousand in general liability. The Company has an additional premium payable clause under its lead $10of $10.0 million limit excess policy that states in the event alosses exceed $2.0 million, an additional loss exceeds $1 million, a loss additional premium of up to 15% to 17% of paidwill be payable for losses in excess of $1 million will be due.$2.0 million. The additional loss additional premium is payable at the time when the insurers pay for the loss is paid and will be payable over a period agreed by the insurers.

The Company has accrued liabilities totaling $5.9$5.8 million and $5.2$7.0 million as of June 30, 2019March 31, 2020 and December 31, 2018,2019, respectively, for the projected additional premium and self-insured portion of these insurance claims as of the financial statement dates. This accrual includes claims made as well as an estimate for claims incurred but not reported by using third party data and claims history as of the financial statement dates.

The Company is currently undergoing sales and use tax audits for multi-year periods. The Company believes the outcome of these audits will not have a material adverse effect on its results of operations or financial position. Because certain of these audits are in a preliminary stage, an estimate of the possible loss or range of loss cannot reasonably be made.

The following tables illustrate the financial impact of the Company's leases, as of and for the three and six months ended June 30, 2019, along with other supplemental information about the Company's leases (in thousands, except years and percentages):

The following table summarizes the maturity of the Company's debt, operating and finance leases as of June 30, 2019March 31, 2020 (in thousands):

A summary of the Company's share-based compensation expense during the periods presented are as follows (in thousands):

During the sixthree months ended June 30, 2019,March 31, 2020, the Company granted no292,163 restricted stock units to officers and employees subject to the Management Incentive Plan. Below is a summary of the unvested restricted stock units.

The Company incurred related party expenses, primarily related to lease rents, of $0.2 million and $0.3 million duringfor the three months ended June 30,March 31, 2020 and 2019, and 2018, respectively, and $0.5 million and $0.6 million for the six months ended June 30, 2019 and 2018, respectively.

There was no related party revenue for the three months ended June 30, 2019March 31, 2020 and 2018 or for the six months ended June 30, 2019 and 2018.2019.

There were no related party accounts receivable or accounts payable as of June 30, 2019March 31, 2020 or December 31, 2018.2019.

In addition to such related party transactions above, Lawrence “Larry” First, a director of FES Ltd., serves as the Chief Investment Officer and Managing Director of Ascribe Capital LLC, or Ascribe, and Brett G. Wyard, also a director of FES Ltd., serves as a Managing Partner of Solace Capital Partners, or Solace. Ascribe and/or one or more of its affiliates, own approximately 23.6% of the outstanding common stock as of June 30, 2019,April 16, 2020 and isremained consistent through the date these financial statements were issued, was owed approximately $16.5$16.8 million of the aggregate principal amount of the Term Loan Agreement and approximately $27.5$27.9 million of the aggregate principleprincipal amount of the PIK Notes. Solace and/or one of its affiliates, own approximately 17.4% of the outstanding common stock as of June 30, 2019,April 16, 2020 and isremained consistent through the date these financial statements were issued, was owed approximately $15.1$15.3 million of the aggregate principal amount of the term loan covered by the Term Loan Agreement and approximately $20.3$20.8 million of the aggregate principal amount of the PIK Notes. Moreover, an affiliate of Solace and affiliates of Ascribe are parties to certain registration rights agreement by and among the Company and certain stockholders of the Company.

Basic earnings (loss)loss per share or EPS, is computed by dividing net income (loss)loss available to common stockholders by the weighted-average common stock outstanding during the period. Diluted earnings (loss)loss per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock, such as restricted stock units or the PIK Notes, were exercised and converted into common stock. Potential common stock equivalents relate to outstanding stock options and unvested restricted stock units, which are determined using the treasury stock method, and the PIK Notes, which were determined using the "if-converted" method. In applying the if-converted method, conversion is not assumed for purposes of computing diluted EPSloss per share if the effect would be antidilutive.

The following table sets forth the computation of basic and diluted loss per share (in thousands, except per share amounts):

There were 322,040455,858 and 363,300322,040 unvested restricted stock units that were not included in the calculation of diluted EPSnet loss per share for the three and six months ended June 30,March 31, 2020 and 2019, and 2018, respectively, and approximately 28.3 million shares related to the potential conversion of the PIK Notes at June 30, 2019 because their effect would have been antidilutive.

The Company's well servicing segment utilizes a fleet of well servicing rigs, which was comprised of workover rigs, and swabbing rigs, and other related assets and equipment to provide the following services:(i) well maintenance, including remedial repairs and removal and replacement of downhole production equipment, (ii) well workovers, including significant downhole repairs, re-completions and re-perforations, (iii) completion and swabbing activities, (iv) plugging and abandonment services, and (v) pressure testing of oil and natural gas production tubing and scanning tubing for pitting and wall thickness using tubing testing units.

The coiled tubing segment utilizes our fleet of coiled tubing units to provide a range of services accomplishing a wide variety of goals including horizontal completions, well bore clean-outs and maintenance, nitrogen services, thru-tubing services, formation stimulation using acid and other chemicals, and other pre- and post-hydraulic fracturing well preparation services.

The Company's fluid logistics segment utilizes a fleet of fluid transport trucks and related assets, including specialized vacuum, high-pressure pump and tank trucks, frac tanks, water wells, salt water disposal wells and facilities, and related equipment to provide services such as transportation, storage and disposal of a variety of drilling and produced fluids used in, and generated by, oil and natural gas production. These services are required in most workover and completion projects and are routinely used in the daily operation of producing wells.

The following table sets forth certain financial information with respect to the Company’s reportable segments (in thousands):