|12 Months Ended|
Dec. 31, 2017
|Debt Disclosure [Abstract]|
Note 9. SENIOR DEBT
On October 28, 2015, the Company entered into an $8,000 senior credit facility (“Facility”). The Facility had a two-year term, and interest payments in the amount of 12%, paid quarterly in arrears. Additionally, there is a “payment in kind” (PIK) provision providing a 4% per annum increase in the principal balance monthly. The Facility is secured by all assets of the Company. As a condition of the Facility, the Company issued 163,441 shares of its Series D Preferred Stock and 391,903 shares of its Series F Preferred Stock to the lender. A market valuation was performed on this transaction by a qualified third-party valuation firm, an original issue discount of $437 was recorded and is being amortized on a straight-line method, approximating the interest rate method, over twenty-four months to Interest Expense on the Consolidated Statement of Operations. During the period ended December 31, 2017 and 2016, $182 and $255, respectively, was included in amortization of debt discount, and $0 and $182 remained unamortized as of December 31, 2017 and 2016, respectively.
On April 5, 2016, the Company entered into an amendment agreement (“Amendment No.1”) to the Facility, amending select provisions of the original credit agreement, including equity raises and changes to certain financial and operational covenants. On September 30, 2016, the Company entered into a second amendment agreement (“Amendment No. 2”) to consolidate a series of short-term bridge loans which were granted to the Company from time to time during the second and third quarters of 2016 into a $5,000 loan, with a maturity date of April 30, 2017 bearing interest at 12% and a PIK provision of 4%. Amendment No. 2 also amended certain covenants.
During March 2017, the Company borrowed an additional $1,500 under the terms of the Facility, originally due April 30, 2017, but subsequently extended to March 31, 2019.
On April 20, 2017, as part of the Benchmark acquisition, the Facility was amended (“Amendment No. 3”) to provide for an additional $11,480 of which approximately $10,100 was applied to the cash purchase price and extended the maturity date of the Facility to March 31, 2019. The Company issued 256,801 shares of Common Stock to the senior lender with a fair value of $5,649 as a term of Amendment No. 3. The value of the shares was recorded as a debt discount. During the year ended December 31, 2017, $2,048 was included in amortization of debt discount costs, and $3,601 remained unamortized as of December 31, 2017. Amendment No. 3 included certain covenants regarding debt coverage, EBITDA and revenue.
During April 2017, the Company incurred a $480 extension fee to extend the Facility to March 31, 2019. This amount was added to the principal amount of the Facility and incurs interest under the terms of the Facility.
During October and November 2017, the Company borrowed a total of $1,600 under the terms of the Facility, due March 31, 2019.
The Company recognized $1,848 in original issuance discounts on the straight-line method over the term of the related senior debt which approximates the effective interest method and recognized $548 in amortization expense and $1,300 remained unamortized as of December 31, 2017.
The Company incurred $598 and $875 in deferred financing costs during the years ended December 31, 2017 and 2016, respectively, which are being amortized on the straight-line method over the term of the related senior debt which approximates the effective interest method through March 2019. During the period ended December 31, 2017 and 2016, $786 and $522, respectively, was included in amortization of deferred financing costs, and $431 and $620 remained unamortized as of December 31, 2017 and 2016, respectively.
During the year ended December 31, 2017, the Company reclassified 444,275 shares of Common Stock held by its senior lender with a fair value of $438 from temporary equity to permanent equity which is included in the Stockholders’ Equity section of the Consolidated Balance Sheet as of December 31, 2017. The temporary equity was reclassified due to the put provision included in the original Facility being removed upon the execution of Amendment No. 3 resulting from the Benchmark acquisition on April 20, 2017.
The required principal payments for all borrowings for each of the five years following the balance sheet date are as follows: