Note 10 - Credit Facility and Convertible Notes

6 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Debt Disclosure [Text Block]

1

0

. Credit Facility

and

Convertible

Notes

The Company maintains financing facilities

and convertible note purchase agreements. For a description of the Company’s debt financing, see the notes to consolidated financial statements contained in the Company’s Annual Report on Form

10

-K for the year ended

March 31, 2017

and the summaries set forth below.

Amendment of Business Financing Agreement

On

June 1, 2017,

the Company and its wholly owned subsidiary, Determine Sourcing, Inc., entered into Amendment Number Ten to Amended and Restated Business Financing Agreement (the “Amendment”) with Western Alliance Bank, an Arizona corporation, as successor in interest to Bridge Bank, National Association (“Western Alliance”). The Amendment extended the maturity date of the underlying credit facility to

April 20, 2019

and increased the interest rate to the prime rate or

4.00%,

whichever is greater, plus

0.25%.

Amendment of Limited Guaranties

 

  In connection with the Amendment, on

June 1, 2017,

Lloyd I. Miller III (“Mr. Miller”) and his affiliates MILFAM II, L.P. (“MILFAM”) and Alimco Financial Corporation, a Delaware corporation formerly known as Alliance Semiconductor Corporation (“ALMC”) each entered into a further Amended and Restated Limited Guaranty (collectively, the “Amended Guaranties”) with Western Alliance. The Amended Guaranties extend the term of the Amended and Restated Limited Guaranties entered into by Mr. Miller and MILFAM with Western Alliance on

April 22, 2016,

and the Second Amended and Restated Limited Guaranty entered into by ALMC with Western Alliance on

January 23, 2017,

to

April 30, 2019.

The Amended Guaranties also provide that if the maturity date of the credit facility with Western Alliance is subsequently amended, the terms of the Amended Guaranties would automatically extend to a date

ten

(

10

) days following the extended maturity date under such credit facility, but

no

later than

July 30, 2020.

Amendment to Guaranty Fee Agreements

 

 On

June 1, 2017,

the Company, Mr. Miller, MILFAM and ALMC (the “Guarantors”) entered into a Guaranty Fee Agreement (the “Fee Agreement”), pursuant to which the Company agreed to pay the Guarantors an extension fee of an aggregate of

50,000

shares of the Company’s common stock on a pro rata basis to each of the respective Guarantors. Additionally, if the maturity date under the credit facility with Western Alliance is subsequently amended such that the terms of the Amended Guaranties are further extended as described above, the Company would pay the Guarantors an additional extension fee of an aggregate of

62,500

shares of the Company’s common stock on a pro rata basis to each of the respective Guarantors. 

Note Conversion

On

June 21, 2017,

Mr. Miller

and

two

of his affiliates (the

“March 2015

Investors”) elected to convert approximately

$1.0

million of outstanding interest and principal payable under the junior secured convertible promissory notes dated as of

March 11, 2015,

as amended (the

“March 2015

Notes”), into an aggregate of

170,733

shares of the Company’s common stock at the conversion price of

$5.70

per share. To induce the

March 2015

Investors to convert the

March 2015

Notes, the Company entered into a subscription and investment representation agreement with the

March 2015

Investors pursuant to which the Company issued an additional

218,540

shares of common stock to the

March 2015

Investors. The shares converted and shares issued to induce the conversion together resulted in an acquisition of shares at a price approximately equivalent to the price to the investors of the shares sold in the Registered Direct Offering discussed in Note

6,

Stockholders’

Equity

, above. As of

September 30, 2017,

the

March 2015

Notes had an outstanding principal balance of

$2.3

million.

As of

September 30, 2017

and

March 31, 2017,

the Company owed

$12.0

million and

$11.9

million, respectively, under the Credit Facility, and

$1.0

million and

$1.1

million was available for future borrowings, respectively. The Company’s Credit Facility with Western Alliance contains certain financial covenants that require, among other things, the maintenance of an asset coverage ratio of

not

less than

2:00

to

1:00

 at the end of each month. During the

three

and

six

months ended

September 30, 2017,

the Company met all the requirements and was in compliance.