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Alias Born | 11/15/2007 |
Tuesday, April 25, 2017 7:21:40 PM
On November 2, 2016, the Company and certain of the Company’s subsidiaries entered into a Loan and Security Agreement (the “Loan Agreement”) with GACP Finance Co. LLC as administrative agent (“Agent”) and the other lenders as from time to time party thereto. The Loan Agreement has a three-year term and provides for term loan commitments of up to $25,000,000 consisting of an Initial Term Loan in the amount of $13,500,000 and a Delayed Draw Term Loan in the amount of $11,500,000 (each a “Loan” or together “Loans”). The Company used the proceeds from the Initial Term Loan to repay all of its existing secured debt. The Company intends to use the Delayed Draw Term Loan to fund acquisitions of portfolios of recurring residual revenues from credit and debit card transactions or companies that own these portfolios. Funding of Delayed Draw Term Loan is subject to certain conditions including but not limited to borrowing base limitations and further lender due diligence.
The Loan Agreement requires the maintenance of certain financial covenants. The Company was in compliance with its covenants at year end but was not in compliance with certain financial covenants subsequent to December 31, 2016. The Company is in discussions with the Lender on a resolution to the covenant breach. The Company believes that, if required by the Lender, it would be able to refinance the Loan with a different lender. The Company also has identified potential transactions and acquisitions which, if completed, would be expected to improve income from operations and the ability to service debt. In addition, the Company could also sell a portion of its residual portfolio and use the proceeds to pay down all or a portion of the Loan. Although the Company believes that it will be able to resolve the covenant breach with the Lender or if it is unable to do so, either refinance the Loan or sell a portion of its residual portfolio to repay the Loan or some combination of all of these options, there can be no assurance that it will be to do so.
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