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Note 9 - Debt
3 Months Ended
Mar. 31, 2020
Notes to Financial Statements  
Debt Disclosure [Text Block]
9.
Debt
 
2020
Notes and
2020/21
Notes
 
The following table sets forth information pertaining to the
2020
Notes and
2020/21
Notes which are included in the Company’s consolidated balance sheets (in thousands):
 
   
Principal
Amount
of
2020 Notes
   
Principal
Amount
of
2020/21 Notes
   
Debt
Discount
   
Debt Issue
Costs
   
Total
Notes
   
 
Embedded
Derivative
   
Total
 
                                                         
Balance - December 31, 2019
  $
14,053
    $
    $
(123
)
  $
(30
)   $
13,900
    $
    $
13,900
 
                                                         
Amortization of debt discount
   
     
     
95
     
     
95
     
     
95
 
Amortization of debt issue costs
   
     
     
     
8
     
8
     
     
8
 
Paid-in-kind interest
   
47
     
     
     
     
47
     
     
47
 
Exchange of 2020 Notes for 2020/21 Notes    
(14,100
)    
14,100
     
     
     
     
     
 
Original issue discount paid with 2020/21 Notes    
     
282
     
(282
)    
     
     
     
 
Fair value of 2020/21 embedded derivative    
     
     
     
     
     
2,848
     
2,848
 
Change in fair value of 2020/21 Notes embedded derivative
   
     
     
     
     
     
(2,748
)    
(2,748
)
                                                         
Balance - March 31, 2020
  $
    $
14,382
    $
(310
)
  $
(22
)   $
14,050
    $
100
    $
14,150
 
 
On
June 20, 2017,
the Company issued the
2020
Notes in exchange for its
12.0%
convertible senior secured notes due
2017
(the
"2017
Notes"), plus an amount in cash equal to the accrued and unpaid interest. The
2020
Notes had a maturity date of
March 15, 2020
and were secured by a
first
lien on substantially all of our assets. The
2020
Notes had an interest rate equal to
12%
per annum (with
2%
potentially payable as PIK Interest (as defined and described below) at our option), payable on
March 31,
June 30,
September 30
and
December 31
of each year. To the extent that the Company paid any portion of the interest due on the
2020
Notes as PIK Interest, the maximum aggregate principal amount of the
2020
Notes that would have been convertible into shares of the Company's common stock increased.
 
Under certain circumstances, the Company had the option to pay a portion of the interest due on the
2020
Notes by either (a) increasing the principal amount of the
2020
Notes by the amount of interest then due or (b) issuing additional
2020
Notes with a principal amount equal to the amount of interest then due (interest paid in the manner set forth in (a) or (b) being referred to as “PIK Interest”).
 
Additional shares of the Company's common stock could also have become issuable pursuant to the
2020
Notes in the event the Company was required to make certain make-whole payments as provided in the
2020
Notes Indenture.
 
The
2020
Notes were convertible into shares of the Company's common stock, subject to certain terms and conditions. The initial conversion price of the
2020
Notes was equal to
$14.72
per share of common stock, or
0.0679
shares of common stock per
$1
principal amount of
2020
Notes.
 
2020/21
Notes
 
On
January 10, 2020,
the Company entered into an Exchange and Purchase Agreement (as amended, the
“2020/21
Purchase Agreement”) with the guarantors party thereto (the "Guarantors"), the holder of the
2020
Notes and Whitebox Advisors LLC ("Whitebox"), in its capacity as representative of the holder. Pursuant to the terms of the
2020/21
Purchase Agreement, the holder of the
2020
Notes, subject to certain conditions, agreed to exchange all of the outstanding principal amount of the
2020
Notes, which was approximately
$14.1
million including unpaid accrued interest, for approximately
$14.4
million in aggregate principal amount of the Company's newly created
2020/21
Notes (the
“2020/21
Exchange”).  Pursuant to the
2020/21
Purchase Agreement, the Company also granted an option to purchase up to an additional aggregate principal amount of approximately
$7.1
million of
2020/21
Notes (the
“2020/21
Option Notes”), at a purchase price equal to the aggregate principal amount of such
2020/21
Option Notes purchased less an original issue discount of
2.0%,
having identical terms (other than with respect to the issue date and restrictions on transfer relating to compliance with applicable securities law) to the
2020/21
Notes issued, at any time during the period beginning on the date of closing of the
2020/21
Exchange and ending on the later of (a)
180
days thereafter, and (b)
30
days following the date on which Stockholder Approval (as described below) is obtained. In addition, on
January 10, 2020,
the Company completed the
2020/21
Exchange and cancelled the
2020
Notes. In addition, the Company entered into an Indenture by and among the Company, the guarantors named therein (the
“2020/21
Notes Guarantors”) and FSB, as trustee and as collateral trustee (the “Original Indenture”), as supplemented by that certain First Supplemental Indenture, dated as of
April 7, 2020 (
the “First Supplemental Indenture” and, together with the Original Indenture, the
“2020/21
Notes Indenture”), pursuant to which the Company issued the
2020/21
Notes. The Company recognized an approximately
$0.7
 million loss. See "
(Loss) on modification of 
2020
Notes
" within the Consolidated Statements of Operations.
 
The
2020/21
Notes will mature on
December 31, 2020,
provided that the maturity date will automatically be extended to
April 1, 2021
if (i) approval of a stockholder proposal is obtained prior to
June 30, 2020
for the issuance of shares of the Company’s common stock under the
2020/21
Notes Indenture in excess of
19.99%
of the outstanding shares of the Company’s common stock on the date of the Original Indenture (the “Stockholder Approval”), and (ii) the aggregate outstanding principal balance of the
2020/21
Notes (including any
2020/21
Option Notes) as of
December 15, 2020
is less than
$7
million. The
2020/21
Notes bear interest at a rate equal to
12%
per annum (with
4%
payable as PIK Interest (as defined and described below)), payable on
March 31,
June 30,
September 30
and
December 31
of each year. Under certain circumstances, the Company will have the option to pay a portion of the interest due on the
2020/21
Notes by either (a) increasing the principal amount of the
2020/21
Notes by the amount of interest then due or (b) issuing additional
2020/21
Notes with a principal amount equal to the amount of interest then due (interest paid in the manner set forth in (a) or (b) being referred to as “PIK Interest”). In the event the Company pays any portion of the interest due on the
2020/21
Notes as PIK Interest, the maximum aggregate principal amount of
2020/21
Notes that could be convertible into shares of the Company’s common stock will be increased.
 
The
2020/21
Notes are convertible into shares of the Company’s common stock at the conversion price, subject to certain terms and conditions. The initial conversion price of the
2020/21
Notes is equal to
$2.442
 per share of the Company’s common stock (the
“2020/21
Notes Conversion Price”), or
0.4095
shares of the Company’s common stock per
$1
principal amount of
2020/21
Notes. The Company and the holders
may
also mutually agree on other conversions of the
2020/21
Notes into shares of the Company’s common stock on a monthly basis (a “Contractual Conversion”) pursuant to the terms of the
2020/21
Notes Indenture. The
2020/21
Notes Conversion Price in a Contractual Conversion will be reduced to the lesser of the then-applicable
2020/21
Notes Conversion Price or a
10%
discount to the average of the daily volume weighted average price of the Company’s common stock for the
three
forward trading days prior to the date of the Contractual Conversion.
 
Each holder has agreed
not
to convert its
2020/21
Notes into shares of the Company’s common stock to the extent that, after giving effect to such conversion, the number of shares of the Company’s common stock beneficially owned by such holder and its affiliates would exceed
4.99%
of the Company’s common stock outstanding at the time of such conversion (the
“4.99%
Ownership Limitation”); provided that a holder
may,
at its option and upon
61
days’ prior notice to the Company, increase such threshold to
9.99%
(the
“9.99%
Ownership Limitation”). If a conversion of
2020/21
Notes by a holder would exceed the
4.99%
Ownership Limitation or the
9.99%
Ownership Limitation, as applicable, the
2020/21
Purchase Agreement contains a provision granting the holder a fully funded prepaid warrant for such common stock with a term of
nine
months, subject to a
six
-month extension, which it can draw down from time to time.
 
The
2020/21
Notes
may
be redeemed in whole or in part, at the Company’s option, for cash at any time after the Stockholder Approval is obtained and upon
120
days’ notice to the holders of the
2020/21
Notes. A Redemption Make-Whole Payment (as defined in the
2020/21
Notes Indenture) applies only to a redemption of
2020/21
Notes that occurs on or after
December 31, 2020.
Following a notice of redemption of the
2020/21
Notes by the Company, the holders
may
elect to convert the
2020/21
Notes into shares of the Company’s common stock at the same conversion price as applicable to a Contractual Conversion.
 
The
2020/21
Notes do
not
contain any anti-dilution adjustments for future equity issuances that are below the
2020/21
Notes Conversion Price, and adjustments to the
2020/21
Notes Conversion Price will only generally be made in the event that there is a dividend or distribution paid on shares of the Company’s common stock, a subdivision, combination or reclassification of the Company’s common stock, or at the discretion of the Board of Directors of the Company in limited circumstances and subject to certain conditions.
 
The
2020/21
Notes are secured by a lien on substantially all of the assets of the Company and the
2020/21
Notes Guarantors, including intellectual property and real property, and are guaranteed by the Company’s existing subsidiaries.
 
Additional shares of the Company's common stock could also become issuable pursuant to the
2020/21
Notes in the event the Company is required to make certain make-whole payments as provided in the
2020/21
Notes Indenture.
 
Under certain circumstances, the Company
may
file
one
or more registration statements on Form S-
3
or amend filings in order to register shares of common stock for sale or resale, as necessary in connection with the
2020/21
Notes.
 
Loans Payable - Other
 
During the
first
quarter of
2020,
the Company purchased equipment under a financing lease. During the
fourth
quarter
2019,
the Company purchased equipment and financed part of its insurance obligation. The equipment notes and financing lease pay interest between
4%
and 
21%,
have total monthly payments of
$0.1
million and mature at various dates from
August 2020
to
February 2025.
The equipment loans are secured by the related equipment. The balance of these loans at
March 31, 2020
and 
December 31, 2019
are as follows (in thousands):
 
   
March 31, 2020
   
December 31, 2019
 
                 
Equipment   $
318
    $
321
 
Insurance    
289
     
428
 
                 
Total notes payable - other    
607
     
749
 
Less current portion    
(375
)    
(516
)
                 
Long-term portion   $
232
    $
233
 
 
Future payments for Loans Payable - Other are as follows (in thousands):
 
Year ending December 31,
 
 
 
 
         
2020 (remaining)   $
353
 
2021    
89
 
2022    
65
 
2023    
65
 
2024 and thereafter    
35
 
         
    $
607
 
 
Small Business Administration Loans
 
In
April 2020,
the Company and Agri-Energy each entered into a loan agreement with Live Oak Banking Company, pursuant to which the Company and Agri-Energy obtained loans from the Small Business Administration's Paycheck Protection Program (“SBA PPP”) totaling
$1.0
million in the aggregate (the "SBA Loans"). The SBA Loans will mature in
April 2022
and bear interest at a rate equal to
1%
per annum, subject to the potential for partial or full loan forgiveness as dictated by U.S. federal law. Principal and interest are deferred until
November 2020
and interest continues to accrue during the deferral period. The SBA Loans are payable monthly beginning
November 5, 2020,
with aggregate payments totaling
$0.06
million per month, including interest and principal. The SBA Loans must be used for payroll, rent payments, mortgage interest payments and utilities payments as governed by the SBA PPP and are subject to partial or full forgiveness for the initial
eight
-week period following the loan disbursement if all proceeds are used for eligible purposes and within certain thresholds, the Company maintains certain employment levels and the Company maintains certain compensation levels.