|12 Months Ended|
Mar. 31, 2015
|Debt Disclosure [Abstract]|
On March 6, 2015, in connection with the Company’s acquisition of Appia, Inc., DT Media entered into a new Amended and Restated Loan and Security Agreement with Silicon Valley Bank (the “SVB Debt”) which replaced and restated DT Media’s prior agreement with Silicon Valley Bank. The SVB Debt includes a term loan and a revolving line of credit.
The term loan, with a principal balance of $600 as of March 31, 2015, is due in twelve equal monthly principal installments of $50 through April 1, 2016 together with monthly payment of interest at a floating per annum rate equal to the greater of (A) two and one-half percentage points (2.50%) above the Prime Rate or (B) six and one-half percent (6.50%). At March 31, 2015, the interest rate was 6.50%.
Revolving line of credit
The revolving line of credit allows DT Media to borrow up to the lesser of $3,500 or the Borrowing Base, which is 80% of eligible accounts receivable. At March 31, 2015, DT Media had borrowed $3,000 under the revolving line. The revolving line matures on June 30, 2015 and accrues interest at a floating per annum rate equal to the greater of (A) one and one-half percentage points (1.50%) above the Prime Rate or (B) five and one-half percent (5.50%), payable monthly. At March 31, 2015, the interest rate was 5.50%.
DT Media’s obligations under the SVB Debt are secured by substantially all of DT Media’s assets. Additionally, Digital Turbine has guaranteed DT Media’s obligations under the SVB Debt, and pledged substantially all of its assets, including its intellectual property, to Silicon Valley Bank in support of the SVB Debt.
On June 11, 2015, (the “Closing Date”), our wholly owned subsidiary Digital Turbine Media, Inc. (f/k/a Appia, Inc., f/k/a PocketGear, Inc.), a Delaware corporation (the “Borrower”) and Silicon Valley Bank, a California corporation (“Bank”) entered into a Third Amended and Restated Loan and Security Agreement, pursuant to which Bank has agreed to amend and restate the existing Second Amended and Restated Loan and Security Agreement to increase the revolving line of credit available under such facility from $3,500 to $5,000, to extend the maturity date under the facility to June 30, 2016, and to make certain other changes to the terms of the existing agreement. Refer to section 9B for an update on the Silicon Valley Bank revolving credit facility
On March 6, 2015, in connection with the acquisition of DT Media, the Company entered into a Securities Purchase Agreement with North Atlantic SBIC IV, L.P. (“North Atlantic”) pursuant to which DT Media sold a senior secured debenture with a principal amount of $8,000 (the “New Debenture”) to North Atlantic. The New Debenture was issued in exchange for two debentures previously sold by DT Media to North Atlantic, which were cancelled.
The New Debenture matures on March 6, 2017, at which time the principal amount is due and payable. The Company may prepay the New Debenture in whole or in part at any time without penalty. The New Debenture bears interest at 10% per annum for the first twelve months, and 14% thereafter; interest is payable monthly.
DT Media’s obligations under the New Debenture are secured by all of DT Media’s assets; additionally, Digital Turbine has guaranteed DT Media’s obligations under the New Debenture, and pledged substantially all of its assets, including its intellectual property, to North Atlantic in support of the New Debenture. The New Debenture is subordinated to the SVB Debt.
In connection with the issuance of the New Debenture, the Company issued to North Atlantic (i) 200,000 shares of the Company’s common stock, and (ii) a warrant to purchase an additional 400,000 shares of the Company’s common stock at an exercise price of $0.001 per share. The warrant is not exercisable until the one year anniversary of the closing date of the merger and will terminate if the Company repays the New Debenture prior to such one year anniversary. The value of the common shares, and the estimated value of the warrant, have been recorded as debt discount and are being amortized over the term of the New Debenture.
The SVB Debt and New Debenture, and the Company’s secured guarantees of such debt, contain covenants, among others, limiting the Company’s ability to undergo a change of control, incur indebtedness, grant liens, make dividends in cash and other customary covenants. At March 31, 2015, DT Media and the Company were compliant with all such covenants.
The Company’s required principal repayments for its outstanding debt as of March 31, 2015, are as follows:
The Stock Purchase Agreement (the “SPA”) to acquire DT EMEA and DT Ignite from Logia Group, Ltd. (“Sellers”) entitled the Sellers to receive certain contingent purchase consideration (“Contingent Consideration”) upon achieving certain milestones. Should all milestones have been achieved, the Contingent Consideration would have been $1,000 payable in cash and shares of stock of the Company. As of March 31, 2014, the Company had recorded the fair value of the Contingent Consideration in Long Term Debt of $1,000, net of a discount of $762. On April 28, 2014, the Company and the Sellers entered into an agreement (“Logia Settlement Agreement”) to settle and resolve certain disputes surrounding the Contingent Consideration, among other claims related to the SPA. The Logia Settlement Agreement absolves or relieves the Company of any and all Contingent Consideration under the SPA. In consideration for the release of all claims the Company deposited 50,000 shares of common stock of the Company into escrow along with the other common stock that was issued under the SPA, and will release all common stock from escrow on periodic, pre-arranged dates through February 1, 2016. Additionally, the Company accrued an additional $60 payable to the Sellers at the Company’s election either in cash or shares valued by both parties at $4.00 per share. As of March 31, 2015, the Company issued 15,000 shares in settlement of that accrual.
The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.
Reference 1: http://www.xbrl.org/2003/role/presentationRef