Live Ventures Incorporated (NASDAQ:LIVE) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01.
ApplianceSmart Financing Transaction
On March 15, 2019, ApplianceSmart, Inc. (the “Borrower”), a subsidiary of Live Ventures Incorporated (the “Company”), the registrant, entered into a Loan and Security Agreement (the “Loan Agreement”) with Crossroads Financing, LLC (the “Lender”), providing for a $4.0 million revolving credit facility, subject to a borrowing base limitation (the “ABL Facility”). The borrowing base for the ABL Facility at any time equals the lower of (i) up to 75% of inventory cost or (ii) up to 85% of net orderly liquidation value, in each case as further described in the Loan Agreement. The proceeds of the ABL Facility will be used by the Borrower to repay a portion of the outstanding loan owed by ApplianceSmart Holdings LLC, Borrower’s parent (“Parent”), to Appliance Recycling Centers of America, Inc., to pay transaction costs, and for working capital and other general corporate purposes.
Advances under the Loan Agreement bear interest at an interest rate equal to the greater of (i) the three-month London Interbank Offered Rate plus 2.19% or (ii) 5.0%. In addition to paying interest on the outstanding principal under the ABL Facility, the Borrower is required to pay Lender a servicing fee equal to 1.0% per month of the amount of the Borrower’s outstanding obligations under the Loan Agreement that accrue interest, an annual loan fee of $80,000, an early termination fee described below, and other fees described in the Loan Agreement.
Unless terminated early in accordance with its terms, the Loan Agreement terminates on March 15, 2021 (the “Maturity Date”). If the Loan Agreement is terminated by the Borrower prior to the Maturity Date, Borrower is required to pay Lender (i) a fee in an amount equal to $120,000 if the Loan Agreement is terminated prior to March 15, 2020 and (b) if the Loan Agreement is terminated on or after March 15, 2020, a fee in an amount equal to $80,000.
Advances under the Loan Agreement are guaranteed by Parent and ApplianceSmart Contracting, Inc., a wholly-owned subsidiary of Parent. In addition, certain executive officers of the Borrower have agreed to provide validity guarantees. Advances under the Loan Agreement are secured by a pledge of substantially all of the assets of the Borrower. The Company is not a guarantor under the Loan Agreement.
The Loan Agreement contains representations and warranties, events of default, affirmative and negative covenants and indemnities customary for loans of this nature.
The foregoing description of the Loan Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of such agreement, a copy of which is attached hereto as an exhibit to this Current Report on Form 8-K and is incorporated herein by reference.
| Item 2.03. | Creation of a Direct Financial Obligations or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth in Item 1.01 above is incorporated by reference into this Item 2.03.
| Item 9.01. | Financial Statements and Exhibits |
(d) Exhibits
LIVE VENTURES Inc Exhibit
EX-10.1 2 live_8k-ex1001.htm LOAN AND SECURITY AGREEMENT Exhibit 10.1 LOAN AND SECURITY AGREEMENT This LOAN AND SECURITY AGREEMENT is entered into as of March 15,…
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About Live Ventures Incorporated (NASDAQ:LIVE)
Live Ventures Incorporated, formerly LiveDeal, Inc., is a holding company. The Company offers LiveDeal.com, a real-time deal engine that connects restaurants across the United States and consumers via a platform. The Company operates in three segments: legacy merchant’s services; online marketplace platform, and manufacturing. The legacy merchants’ services segment consists of local exchange carrier (LEC) and Velocity Local. The online marketplace platform segment consists of LiveDeal.com and various consumer products entities. The manufacturing segment includes the operations of Marquis Industries, Inc. (Marquis Industries). Marquis Industries is a carpet manufacturer and a manufacturer of yarn products, as well as a reseller of hard surface flooring products. LiveDeal.com provides marketing solutions to restaurants to boost customer awareness and merchant visibility on the Internet.
