Quarterly report pursuant to Section 13 or 15(d)

Notes Payable

v3.7.0.1
Notes Payable
6 Months Ended
Jun. 30, 2017
Debt Disclosure [Abstract]  
Notes Payable
Notes Payable
The following table presents the balances of notes payable as of the dates indicated:
 
Lending Institution
 
Maturity Date
 
June 30,
2017
 
December 31, 2016
 
Interest Rates
 
 
 
 
 
June 30, 2017
 
December 31, 2016
Working Capital Loan
Branch Banking and Trust Company
 
November 28, 2019
 
$
3,950,000

 
$
3,950,000

 
2.94
%
 
2.44
%
$22.6 Million Equipment Loan
Branch Banking and Trust Company
 
March 9, 2021
 
22,600,000

 

 
2.94
%
 
%
$10.0 Million Equipment Loan
Branch Banking and Trust Company
 
July 28, 2020
 

 
7,579,630

 
%
 
2.81
%
$17.0 Million Equipment Loan
Branch Banking and Trust Company
 
March 6, 2020
 

 
9,601,000

 
%
 
2.50
%
$2.0 Million Equipment Loan
Branch Banking and Trust Company
 
March 6, 2020
 

 
1,256,625

 
%
 
2.50
%
Total notes payable
 
 
 
26,550,000

 
22,387,255

 
 
 
 
Less unamortized debt issuance costs
 
50,481

 
54,027

 
 
 
 
Total notes payable, net
 
26,499,519

 
22,333,228

 
 
 
 
Less current portion of notes payable, net
 
6,096,045

 
6,101,855

 
 
 
 
Notes payable net, less current portion
 
$
20,403,474

 
$
16,231,373

 
 
 
 

As of June 30, 2017, the Company, and the Company’s wholly owned subsidiaries Southeast Power, Pineapple House of Brevard, Inc. (“Pineapple House”), Bayswater Development Corporation (“Bayswater”), Power Corporation of America (“PCA”), Precision Foundations, Inc. (“PFI”) and C and C Power Line, Inc. (“C&C”), collectively (the “Debtors,”) were parties to a Master Loan Agreement, dated June 9, 2017 (the “2017 Master Loan Agreement”), with Branch Banking and Trust Company (the “Bank”).
As of June 30, 2017, the Company had a loan agreement and a series of related ancillary agreements with the Bank providing for a revolving line of credit loan for a maximum principal amount of $18.0 million, to be used as a “Working Capital Loan.” As of both June 30, 2017 and December 31, 2016, borrowings under the Working Capital Loan were $4.0 million. As a credit guarantor to the Bank, the Company is contingently liable for the guaranty of a subsidiary obligation under an irrevocable letter of credit related to workers’ compensation. The amount of this letter of credit was $420,000 as of both June 30, 2017 and December 31, 2016.
As of June 30, 2017, the Debtors had a loan agreement with the Bank for the $22.6 Million Equipment Loan which is guaranteed by the Debtors and includes the grant of a continuing security interest in all now owned and after acquired and wherever located personal property of the Debtors.
The Working Capital Loan and the $22.6 Million Equipment Loan bear interest at a rate per annum equal to one month LIBOR (as defined in the documentation related to each loan) plus 1.80%, which will be adjusted monthly and subject to a maximum rate as described in the documentation related to each loan.
On June 9, 2017, the Company and the Debtors entered into the $22.6 Million Equipment Loan agreement. Borrowings of $15.6 million from the $22.6 Million Equipment Loan were used to pay in full all the outstanding Bank equipment loans, with the exception of the Working Capital Loan, plus accrued interest and loan closing costs.
The Company’s debt arrangements contain various financial and other covenants including, but not limited to: minimum tangible net worth, maximum debt to tangible net worth ratio and fixed charge coverage ratio. Other loan covenants prohibit, among other things, a change in legal form of the Company, and entering into a merger or consolidation. The loans also have cross-default provisions whereby any default under any loans of the Company (or its subsidiaries) with the Bank, will constitute a default under all of the other loans of the Company (and its subsidiaries) with the Bank.