Quarterly report pursuant to Section 13 or 15(d)

Financings

v3.5.0.2
Financings
6 Months Ended
Jun. 30, 2016
Financings
5. Financings:

The Company has a loan and security agreement with Bank of America to borrow up to $27 million on a revolving basis, based upon specified percentages of eligible receivables and inventory (“the Revolving Credit Facility”) which matures in August 2017. Our Chairman, Chief Executive Officer and President has guaranteed $7 million of the borrowings under the Revolving Credit Facility; this guarantee enables us to borrow $7 million in addition to the amount available from receivables and inventory and may be terminated at any time. As of June 30, 2016, the balance outstanding on the Revolving Credit Facility was $22.6 million. As of June 30, 2016, the Company had total liquidity of $9.6 million, consisting of additional borrowing capacity on the Revolving Credit Facility of $4.4 million and cash on hand of $5.2 million.

 

Borrowings under the arrangement bear interest at a 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 June 30, 2016 amount to $22.6 million and are included in non-current liabilities in the accompanying Condensed Consolidated Balance Sheet.

The Loan Agreement contains covenants which limit the ability of the Company 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. As of July 29, 2016, we were in compliance with our covenants.

In July 2016, the maturity date of the $10 million promissory notes that were issued in August 2015 in connection with the Energy Source acquisition, was extended to January 2017, with an interest rate of 7%.

From time to time the Company enters into financing arrangements with RVL and its affiliates (see Note 10).

Maturities of long-term borrowings for each of the next five years are as follows:

 

(in thousands)

  

2016

     180   

2017

     37,501   

2018

     2,066   

2019

     —     

2020

     —     
  

 

 

 

Total

     39,747