SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2020

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

Issuance of Series B and B1 Preferred Stock Shares In-Kind and Common Stock

We paid the accrued dividends on our Series B Preferred Stock and Series B1 Preferred Stock, which were accrued as of June 30, 2020, in-kind by way of the issuance of 60,915 restricted shares of Series B Preferred Stock pro rata to each of the then holders of our Series B Preferred Stock in July 2020 and the issuance of 109,859 restricted shares of Series B1 Preferred Stock pro rata to each of the then holders of our Series B1 Preferred Stock in July 2020. If converted in full, the 60,915 shares of Series B Preferred Stock would convert into 60,915 shares of common stock and the 109,859 shares of Series B1 Preferred Stock would convert into 109,859 shares of common stock.

Fifth Amendment to EBC Credit Agreement

On August 7, 2020, the Company and Vertex Operating entered into a Fifth Amendment to Credit Agreement with EBC (the “Fifth Amendment”), which amended the EBC Credit Agreement. Pursuant to the Fifth Amendment, EBC agreed to provide the Company up to a $2 million term loan to be used for capital expenditures (the “CapEx Loan”), which amounts may be requested from time to time by the Company, provided that not more than four advances of such amount may be requested, with each advance being not less than $500,000 (in multiples of $100,000). The amendment also provided that any prepayments of the EBC Credit Agreement would first be applied to the term loan and then to the CapEx Loan. The CapEx Loan bears interest at the rate of LIBOR (1.17% at June 30, 2020) plus 7%, or to the extent that LIBOR is not available, the highest of the prime rate and the Federal Funds Rate plus 0.50%, in each case, plus 6%. We are required to repay the CapEx Loan in monthly installments of 1/48^th of the amount borrowed, each month that the CapEx Loan is outstanding, through maturity. The Fifth Amendment also included provisions providing for either the prime rate or Federal Funds Rate, plus 0.50%, to apply as the interest rate of loans made under the EBC Credit Agreement, in the event LIBOR is unavailable or unable to be used for such interest rate calculations. The obligation of EBC to fund the CapEx Loan is subject to customary conditions and requirements set forth in the Fifth Amendment, including the requirement that the Company have maintained daily availability under the ABL Credit Agreement greater than $1 million for the last thirty days, and that such availability would remain over $1 million, on a pro forma basis with such new loan. We are also required to provide the agent for the EBC Credit Agreement, a first priority security interest in the rolling stock collection assets or other assets acquired with the CapEx Loan.