Annual report pursuant to Section 13 and 15(d)

Financings

v3.7.0.1
Financings
12 Months Ended
Dec. 31, 2016
Financings
10. Financings

Revolving Credit Facility

At December 31, 2016, we had a loan and security agreement with Bank of America to borrow up to $27.0 million on a revolving basis, based upon specified percentages of eligible receivables and inventory, which matured in October 2017. Our Chairman, Chief Executive Officer and President guaranteed $7.0 million of the borrowings under the Revolving Credit Facility. This guarantee enabled us to borrow $7.0 million in addition to the amount available from receivables and inventory, and could be terminated at any time (see Note 18). At December 31, 2016 and 2015, the balance outstanding on the Revolving Credit Facility was $26.0 million and $22.0 million, respectively.

Borrowings under the Revolving Credit Facility bore interest at a LIBOR rate or a defined base rate, each plus an applicable margin, depending on the nature of the loan. We were also obligated to pay various fees monthly. At December 31, 2016 and 2015, the weighted average interest rate was 3.95% and 3.65%, respectively. We recorded interest expense of $0.9 million, $0.7 million and $0.2 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Under the Revolving Credit Facility, outstanding loans became payable on demand to the extent that such loans exceed the defined Borrowing Base. All obligations under Revolving Credit Facility were secured by the assets of Revolution, and are guaranteed by Revolution. The Revolving Credit Facility contained covenants that limit our ability to incur other debt, allow a lien on any property, pay dividends, restrict any wholly owned subsidiary from paying dividends, make investments, dispose of property, make loans or advances or enter into transactions with affiliates, among other things.

On January 26, 2017, we entered into an amended loan and security agreement with Bank of America to borrow up to $50.0 million on a revolving basis, based upon specified percentages of eligible receivables and inventory, which matures on January 26, 2020 (the “amended Revolving Credit Facility”). Under the amended Revolving Credit Facility, the maximum applicable margin for LIBOR rate loans decreased to 2.75% from 3.0%, and the maximum applicable margin for base rate loans decreased to 1.75% from 2.0%. Our Chairman, Chief Executive Officer and President has guaranteed $7.0 million of the borrowings under the amended Revolving Credit Facility. See Note 18.

Notes Payable

Notes payable consisted of the following:

 

     December 31,  
     2016      2015  

Energy Source acquisition notes

   $ 10.0      $ 10.0  

Value Lighting acquisition note

     2.4        2.8  

TNT acquisition notes

     2.0        —    
  

 

 

    

 

 

 

Total notes payable

   $ 14.4      $ 12.8  

Less: Notes payable—current

     (2.4      (10.4
  

 

 

    

 

 

 

Notes payable—noncurrent

   $ 12.0      $ 2.4  
  

 

 

    

 

 

 

Energy Source Acquisition Notes

In connection with the acquisition of Energy Source in August 2015, we issued $10.0 million in promissory notes bearing interest at 5% per annum due July 20, 2016, which are supported by an irrevocable letter of credit from RVL (see Note 18). In July 2016, the maturity date was extended to January 20, 2017, with an interest rate of 7%. We recorded accrued interest of $0.3 million and $0.2 million at December 31, 2016 and 2015, respectively. We recorded interest expense of $0.6 million and $0.2 million for the years ended December 31, 2016, and 2015, respectively. On January 26, 2017, we repaid the Energy Source acquisition notes, including interest of $0.4 million, using proceeds from the amended Revolving Credit Facility, and the related guarantee provided by RVL was terminated.

Value Lighting Acquisition Note

In conjunction with the acquisition of Value Lighting, we refinanced $3.7 million of Value Lighting’s trade accounts payable by issuing a note payable to the creditor. The note is payable in monthly installments through October 2019 and a lump sum payment of $1.4 million due on November 22, 2018, which may be settled, at our option, in either cash or an equivalent amount of common shares based upon their then-current market value.

 

TNT Acquisition Notes

In connection with the acquisition of TNT in May 2016, we issued $2.0 million in promissory notes bearing interest at 5% per annum, of which $1.0 million was due on April 21, 2017 and $1.0 million was due on November 6, 2017 (see Note 3). Our Chairman, Chief Executive Officer, and President provided irrevocable letters of credit to support $1.0 million of the TNT acquisition notes. See Note 18. We recorded accrued interest of less than $0.1 million at December 31, 2016. We recorded interest expense of less than $0.1 million for the years ended December 31, 2016. In February 2017, the maturity date was extended to November 6, 2017 for all of the TNT promissory notes. Additionally, in February 2017, our Chairman, Chief Executive Officer, and President provided irrevocable letters of credit to support the additional $1.0 million of the TNT acquisition notes. See Note 18.

Debt Maturities

At December 31, 2016, the schedule maturities of our borrowings were as follows:

 

     Total  
     Notes Payable  

2017

   $ 2.4  

2018

     1.7  

2019

     0.4  

2020

     36.0  
  

 

 

 

Total borrowings

   $ 40.5