Digital Turbine, Inc. (NASDAQ:APPS) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01 Entry Into a Material Definitive Agreement.

Senior Secured Credit Facility

On May 23, 2017, Digital Turbine, Inc. (Digital Turbine, we or
the Company) entered a Business Finance Agreement (the Credit
Agreement) with Western Alliance Bank (the Bank). The Credit
Agreement provides for a $5 million total facility. Fifty percent
of the availability of the total facility is subject to EX-IM
Bank approval.

The amounts advanced under the Credit Agreement mature in two (2)
years, and accrue interest at the following rates and bear the
following fees:

(1) Wall Street Journal Prime Rate 1.25% (currently approximately
5.25%), with a floor of 4.0%.

(2) Annual Facility Fee of $45,500.

(3) Early termination fee of 0.5% if terminated during the first
year.

The obligations under the Credit Agreement are secured by a
perfected first position security interest in all assets of the
Company and its subsidiaries, subject to partial (65%) pledges of
stock of non-US subsidiaries. The Companys subsidiaries Digital
Turbine USA and Digital Turbine Media are co-borrowers.

In addition to customary covenants, including restrictions on
payments (subject to specified exceptions), and restrictions on
indebtedness (subject to specified exceptions), the Credit
Agreement requires the Company to comply with the following
financial covenants, measured on a monthly basis:

(1) Maintain a Current Ratio of at least 0.65, defined as
unrestricted cash plus accounts receivable, divided by all
current liabilities.

(2) Revenue must exceed 85% of projected quarterly revenue.

The Credit Agreement requires that at least two-thirds (2/3rds)
of the holders of the Companys 8.75% Convertible Notes due 2020
(Notes) issued under its September 28, 2016 Indenture, with US
Bank as trustee, as amended (the Indenture) at all times be
subject to subordination agreements with the Bank, which were
obtained in connection with the solicitation of consents for the
Second Supplemental Indenture described below.

The Credit Agreement contains other customary covenants,
representations, indemnities and events of default.

The Companys unaudited cash and cash equivalents as of March 31,
2017 were $6.1 million, with current assets of $23.7 million and
current liabilities of $30.8 million.

The Company intends to use the proceeds of the Credit Agreement
for working capital purposes.

Second Supplemental Indenture and Warrant Amendment.

The Company obtained the consent of the holders of at least
two-thirds (2/3rds) of the Notes, which were held by a small
number of institutional investors, in order to obtain a waiver of
the covenant in the Indenture regarding incurrence of secured
debt. In consideration for such consents, the Company entered
into a Second Supplemental Indenture, dated May 23, 2017 (the
Supplemental Indenture) to the Indenture, and also entered into a
First Amendment, dated May 23, 2017 (the Warrant Amendment) to
the Warrant Agreement , dated September 28, 2016, with US Bank as
warrant agent (the Warrant Agreement), related to the Warrants
that were issued in connection with the Notes in September 2017.

The principal changes effected by the Supplemental Indenture are
as follows:

From and after the determination of the Measured Price (as
defined below), the Conversion Rate (as defined in the Indenture)
of the Notes shall be adjusted to be equal to $1,000 divided
by the Measured Price, subject to adjustment as set forth in
the Indenture.

Measured Price means the dollar amount calculated as follows: (A)
If the sum of (i) the simple average of the Daily VWAP (as
defined in the Indenture) for the Companys Common Stock for all
of the consecutive VWAP Trading Days (as defined in the
Indenture) that occur during a measurement period (essentially,
the period between the 90^th and 120^th days
after the effective date of the Second Supplemental Indenture)
plus (ii) ten percent (10%) of the amount determined under clause
(i) (the Measured Sum) is greater than or equal to $1.00 but less
than or equal to $1.364 (which is the original conversion price
of the Notes immediately prior to the Second Supplemental
Indenture and at original issuance), then the Measured Price
shall be the Measured Sum; (B) if the Measured Sum is less than
$1.00, then the Measured Price shall be $1.00; and (C) if the
Measured Sum is greater than $1.364, then the Measured Price
shall be $1.364.

The principal changes effected by the Warrant Amendment are as
follows:

From and after the determination of the Measured Price (as
defined in the same manner as described above), the Exercise
Price (as defined in the Warrant Agreement) shall be adjusted to
be equal to such Measured Price, subject to adjustment as set
forth in the Warrant Agreement.

Accordingly, the Company expects to determine the changes, if
any, to the Conversion Rate of the Notes and the Exercise Price
of the Warrants by the end of September 2017. The Company
currently intends to announce any such changes by a Current
Report on Form 8-K. Depending on the resulting Measure Price, the
number of shares of Common Stock issuable under the Notes and
Warrants could be increased. An issuance cap of 19.9% applies to
any such increase, however the Company is obligated to seek
stockholder approval so that such cap, if approval is obtained,
would not then apply.

The foregoing summaries of the Credit Agreement, Second
Supplemental Indenture and Warrant Amendment are subject to, and
qualified in its entirety by, the full text of such documents,
which have been filed as exhibits hereto.

Item 2.02 Results of Operations and Financial
Condition.

The information set forth in Item 1.01 and the related exhibits
under Senior Secured Credit Facility regarding cash, current
assets and current liabilities as of March 31, 2017 is deemed
incorporated into this Item by reference. In accordance with
General Instruction B.2 of Form 8-K, such information shall not
be deemed to be filed for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the Exchange Act),
or otherwise subject to the liabilities of that section, and
shall not be incorporated by reference into any registration
statement or other document filed under the Securities Act of
1933, as amended, or the Exchange Act, except as shall be
expressly set forth by specific reference in such filings.

Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of the
Registrant.

The information set forth in Item 1.01 and the related exhibits
under Senior Secured Credit Facility is deemed incorporated into
this Item by reference.

Item 3.02 Unregistered Sale of Equity
Securities.

The information set forth in Item 1.01 and the related exhibits
under Second Supplemental Indenture and Warrant Amendment is
deemed incorporated into this Item by reference.

Item 3.03 Material Modification of
Rights of Security Holders.

The information set forth in Item 1.01 and the related exhibits
under Second Supplemental Indenture and Warrant Amendment is
deemed incorporated into this Item by reference.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

About Digital Turbine, Inc. (NASDAQ:APPS)

Digital Turbine, Inc. is engaged in delivering end-to-end products and solutions for mobile operators, application advertisers, device original equipment manufacturers (OEMs) and other third parties to enable them to monetize mobile content. The Company operates its business in two operating segments: Advertising and Content. The Advertising segment consists of two businesses: Operator and OEM (O&O) and Advertiser and Publisher (A&P). The O&O business is an advertiser solution for carrier and OEM inventory consisting of services, such as Ignite, a mobile device management platform and Discover, an intelligent application discovery platform. Its A&P business is a mobile user acquisition network across the world consisting of services, such as syndicated network and real time bidding (RTB). The Content segment consists of services, including Marketplace, which is an application and content store, and Pay, which is a content management and mobile payment solution.

Digital Turbine, Inc. (NASDAQ:APPS) Recent Trading Information

Digital Turbine, Inc. (NASDAQ:APPS) closed its last trading session down -0.03 at 1.14 with 104,747 shares trading hands.