Debt |
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| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt |
Debt
Senior Debt
On March 6, 2015, in connection with the Company’s acquisition of Appia, Inc., DTM entered into an Amended and Restated Loan and Security Agreement with Silicon Valley Bank in connection with the closing of the DTM (Appia) acquisition, which included a term loan and revolving line of credit. This loan replaced and restated Appia's prior loan agreement with Silicon Valley Bank, and was then amended and restated in June 2015 (as described under "Revolving Line of Credit"). The term loan was fully paid down as of the end of fiscal 2016.
Revolving Line of Credit
On June 28, 2016, our wholly-owned subsidiary DTM, and Silicon Valley Bank, entered into the Third Amendment to the Third Amended and Restated Loan and Security Agreement (the "Amendment"), pursuant to which Silicon Valley Bank agreed to amend and restate the existing Second Amendment to the Third Amended and Restated Loan and Security Agreement to decrease the revolving line of credit available under such facility from $5,000 to $3,300, and to extend the maturity date under the facility from June 30, 2016 to August 14, 2016. Pursuant to the Amendment, the adjusted quick ratio covenant and the application of the streamline trigger (which is not a financial covenant) detailed in the Second Amendment to the Third Amended and Restated Loan and Security Agreement dated June 11, 2015, were removed and replaced with the requirement for the Company to maintain a minimum amount of cash held at SVB to be calculated based on outstanding amounts on the revolving line of credit plus $1,000. Amounts outstanding under letters of credit and business credit cards are not included in this calculation. Under the Amendment, the Company is still required to deliver consolidated financial statements in addition to DTM. At June 30, 2016, DTM and the Company were compliant with all such covenants.
The revolving line of credit under the Amended and Restated Credit Facility allows DTM to borrow up to the lesser of $3,300 or the borrowing base, which is 80% of eligible accounts receivable after consideration of other amounts outstanding, under the revolving line of credit. At June 30, 2016 and March 31, 2016, DTM had borrowed $3,000 under the revolving line. Interest is payable monthly at a floating annual rate equal to (a) during any month for which the Borrower maintained an adjusted quick ratio (as customarily defined) of not less than 1.00:1.00 as of the last day of a month, the prime rate as reported by The Wall Street Journal, plus (1.75%) and (b) at all other times, the prime rate as reported by The Wall Street Journal, plus (2.75%). At June 30, 2016, the interest rate was 6.25%.
Subordinated Debenture and Warrant
On March 6, 2015, in connection with the acquisition of DTM, the Company entered into a Securities Purchase Agreement with North Atlantic SBIC IV, L.P. (“North Atlantic”), pursuant to which DTM sold a 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 Appia 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.
DTM’s obligations under the New Debenture are secured by all of DTM’s assets; additionally, Digital Turbine, Inc. has guaranteed DTM’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 Amended and Restated Credit Facility.
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 a debt discount, which is being amortized over the term of the New Debenture. During the three months ended June 30, 2016 and 2015, debt discount amortized amounted to $118 and $117, respectively, with the debt discount balance amounting to $322 and $440 at June 30, 2016 and March 31, 2016, respectively.
On May 6, 2016, DTM and North Atlantic, entered into a Second Amendment to Securities Purchase Agreement, where DTM agreed to pay North Atlantic the amount of $140 as a fee in connection with the preparation, negotiation, and execution of this amendment. Pursuant to this amendment, the warrant vesting date was modified to June 15, 2016 (the “Retirement Date”).
On June 13, 2016, DTM and North Atlantic, entered into a Third Amendment to Common Stock Purchase Warrant dated March 6, 2015. Pursuant to this amendment, the warrant vesting date was modified from June 15, 2016 to July 15, 2016 (the “Modified Retirement Date”). If the debt is not refinanced by July 15, 2016, then a warrant for 400,000 shares would be issued to North Atlantic and North Atlantic would receive a board observer. DTM agreed to pay North Atlantic the amount of $60 as consideration to extend the Modified Retirement Date from June 15, 2016 to July 15, 2016.
On July 15, 2016, DTM and North Atlantic entered into a Fourth Amendment to Common Stock Purchase Warrant dated March 6, 2015, where DTM agreed to pay North Atlantic the amount of $75 as consideration to extend the Retirement Date to August 29, 2016. See "Subsequent Events" in Note 15 of the Notes to the Consolidated Financial Statements.
The 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 June 30, 2016, DTM and the Company were compliant with all such covenants.
The Company’s required principal repayments for its outstanding debt as of June 30, 2016 are as follows:
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