Quarterly report pursuant to Section 13 or 15(d)

Financings

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Financings
9 Months Ended
Sep. 30, 2014
Financings
11. Financings:

Two subsidiaries of the Company entered into a loan and finance agreements with a financial institution pursuant to which the subsidiary could borrow up to 85% against eligible accounts receivable as defined in the agreement up to a maximum of $2 million. Borrowings under the arrangements bore interest at a rate of 1.75% above the prime rate reported by the Wall Street Journal but not less than 5%. The company was also obligated to pay an annual fee of 1% of the maximum amount that could be borrowed under the arrangement as well a monthly maintenance fee of 0.5 % on the higher of monthly average outstanding principal balance or a specified minimum and certain other fees. The borrowings were repaid as the receivables were collected, were collateralized by specified assets of the subsidiaries and were guaranteed by Revolution. Under the terms of the agreement, the subsidiaries were prohibited from paying dividends and making distributions to the Company. This loan and finance agreement was paid off during the three months ended September 30, 2014. Borrowings outstanding as of December 31, 2013 amount to approximately $0.9 million and are included in accrued liabilities in the accompanying condensed balance sheet.

In August 2014, the Company entered into a 3-year loan and security agreement with Bank of America pursuant to which the Company can borrow up to specified percentages against eligible accounts receivable as defined in the Revolving Credit Facility and against eligible inventory as defined in the Revolving Credit Facility (the “Borrowing Base”) up to a maximum of $25 million. Borrowings under the arrangements bear interest at a rate of the LIBOR rate or a defined base rate, each plus an applicable margin, depending on the nature of the loan. The Company is also obligated to pay various fees monthly. Outstanding loans become payable on demand to the extent that such loans exceed the Borrowing Base, and all outstanding amounts must be repaid on August 20, 2017. All obligations under the Revolving Credit Facility are secured by the assets of the Company and its subsidiaries and are guaranteed by the Company and its subsidiaries. Borrowings outstanding as of September 30, 2014 amount to approximately $12.9 million and are included in bank loan payable under non-current liabilities in the accompanying condensed balance sheet.