Glowpoint, a managed service provider of video collaboration and network applications, completed a recapitalization of its existing debt obligations supported by loans from Western Alliance and Super G Capital.
“We are very pleased to have completed this debt recapitalization, which eliminated $9.36 million of debt obligations and resulted in a significant improvement to our working capital position as of July 31, 2017. The debt recapitalization resulted in significant accretion to shareholder value as it is expected to increase our stockholders’ equity balance by approximately $8.7 million and reduced our outstanding common stock by approximately 386,000 shares as of July 31, 2017,” said Glowpoint CFO David Clark.
As of June 30, 2017, the company had outstanding principal borrowings of $9 million with Main Street Capital under a senior secured term loan facility. As of June 30, 2017, Main Street owned 7,711,517 shares, or 21%, of the company’s common stock.
On July 31, 2017, the company and Main Street entered into a payoff letter that terminated the $9 million Main Street term loan and a redemption agreement whereby the company redeemed 7,711,517 shares of its common stock held by Main Street, in exchange for total cash payments of $2.550 million. On July 31, 2017, the company funded the Main Street payoff using $350,000 of its existing cash plus cash proceeds of $2.2 million borrowed under loan agreements with Western Alliance Bank and Super G Capital.
The company’s cash position was approximately $1.27 million as of July 31, 2017.
On July 31, 2017, the company and its subsidiary entered into a senior secured business financing agreement with Western Alliance Bank, as lender, providing it with up to a total of $1.5 million of revolving loans. The company received a loan in an amount equal to $1.1 million, the proceeds of which were used to fund the Main Street payoff.
On July 31, 2017, the company and its subsidiary entered into a business loan and security agreement with Super G Capital as lender and received a term loan from Super G in an amount equal to $1.1 million, the proceeds of which were used to fund the Main Street payoff.