Special Situations

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Glowpoint, Inc., a managed service provider of video collaboration and network applications, announced that on July 31, 2017, the company completed a recapitalization of its existing debt obligations with support from Western Alliance Bank and Super G. The new financing eliminated $9,362,000 of debt and accrued interest obligations and reduced the Company’s outstanding common stock by 385,517 shares. As of July 31, 2017, there were no remaining obligations related to the Main Street Term Loan or SRS Note. As of July 31, 2017, there were no remaining obligations related to the Main Street Term Loan or SRS Note.

The Company expects that the Debt Recapitalization resulted in an increase of approximately $8,700,000 to stockholders’ equity on the Company’s balance sheet as of July 31, 2017. Therefore, the Company expects to meet the continued listing standards of the NYSE American Company Guide relating to stockholders’ equity (as previously described in the Company’s Form 8-K filed on June 1, 2017), subject to the Company reporting two consecutive quarters of being in compliance with such standards. The following tables summarize the impact of the Debt Recapitalization on the Company’s debt obligations and outstanding common stock as of July 31, 2017:

“Completing this critical phase of debt restructuring provides the Company a foundation to re-align capital structure and market opportunity. Having materially eliminated outstanding debt obligations by over 80%, we now look forward to focusing on product development and expanding our market-leading support platform for video collaboration through the addition of cognitive services and advanced analytics,” said Glowpoint President and CEO Peter Holst.

“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.

Western Alliance Bank Business Financing Agreement

On July 31, 2017, the Company and its subsidiary entered into a senior secured Business Financing Agreement with Western Alliance Bank, as lender (the “Western Alliance Bank Loan Agreement“). The Western Alliance Bank Loan Agreement provides the Company with up to a total of $1,500,000 of revolving loans. On July 31, 2017, the Company received a loan in an amount equal to $1,100,000 under the Western Alliance Bank Loan Agreement, the proceeds of which were used to fund the Main Street Payoff.  See further description of the terms of the Western Alliance Bank Loan Agreement in the Company’s Form 8-K filed on August 1, 2017.

Super G Loan Agreement

On July 31, 2017, the Company and its subsidiary entered into a Business Loan and Security Agreement with Super G Capital, LLC (“Super G”), as lender (the “Super G Loan Agreement”) and received a term loan from Super G in an amount equal to $1,100,000, the proceeds of which were used to fund the Main Street Payoff. The Super G Loan is subordinate to the Western Alliance Bank borrowings. See further description of the terms of the Super G Loan Agreement in the Company’s Form 8-K filed on August 1, 2017.

The Company:
Designs, manufactures, and supports NextGen compliant avionics systems that improve the safety, efficiency, and affordability of flying.

The Financing Situation:
The Company was seeking to refinance its existing senior credit facility and move on to a new lending relationship to better support the strategic initiatives of the Company. The existing credit facility was based on enterprise value and thus required a comprehensive debt facility (beyond a standard ABL facility) for a full take-out plus additional working capital to support growth.

The Solution:
Super G provided a comprehensive financing solution that consisted of two tranches within the $3.5 million credit facility – $1.5 million interest-only loan and a $2.0 million amortizing term loan. This structure allowed the Company to close quickly (within 3 weeks) and provided debt service flexibilty so that the Company had working cpaital cushion and could focus on business execution. Super G worked closely with the Company’s majority shareholder, Elm Creek Partners, to get comfortable with the business and management team to fund the Company quickly.

For more information on Elm Creek Partners, please contact:
Aaron R. Handler
Co-founder and Partner
aaron@elmcreekpartners.com
214-871-5655
www.elmcreekpartners.com

The Company: Venture backed, subscription e-commerce brand.

The Financing Situation:  The Company is in growth mode, rolling out direct-to-consumer brands in addition to its subscription e-commerce business, and was seeking a non-dilutive solution as a bridge to a strategic sale or next equity round.  The Company‘s management team wanted excess working capital cushion to remain focused on growth initiatives and maintain compliance with its bank’s liquidity covenant.

The Solution:  Super G was able to quickly get comfortable with the Company’s value proposition, growth strategy, management team, and institutional backers.  Most importantly, the Company was able to demonstrate a clear path to profitability in a worst case scenario of no strategic sale or additional equity financing.  Super G structured a flexible, non-dilutive second lien loan subordinated to the Company’s senior lender.

The Company:

A sponsor-backed company which engineers, manufactures, and sources customized user-interface and product identification components for customers in the medical, aerospace, industrial, and consumer industries.

The Financing Situation:

The Company was in the process of transitioning from its commercial bank lender to an asset based lender, Marquette Business Credit, and Super G helped complete the financing structure.

The Solution:

Super G was able to get comfortable with the Company’s continued improvements, growth strategy and senior management team. Underwriting and approval process of the 2nd lien loan took place quickly allowing Marquette to present a comprehensive solution to its credit committee.  Super G’s  flexible structured solution, covenant light loan documents, and rapid decision making allowed for an efficient and seamless closing.

The Company: A fully-integrated digital media content company.

The Financing Situation:  The Company was in the process of raising venture capital to fund strategic acquisitions and other long-term growth initiatives.  During this process, the Company needed additional working capital to fund operations in order to maintain its growth trajectory.

The Solution:  Super G was able to quickly get comfortable with the Company’s value proposition, experienced management team, and institutional backer.  Most importantly, the Company demonstrated the ability to sufficiently debt service Super G’s amortizing term loan assuming the venture debt and Series B round did not close.  Super G structured a flexible 2nd lien solution subordinated to the Company’s senior lender, FastPay, a financial platform that provides credit and payment solutions to the global digital media industry.  Super G’s covenant light loan documents and rapid decision making allowed for an efficient and seamless closing.   Post-funding, the Company was able to successfully close its venture debt round.

For more information on FastPay, please contact:

Maytal Shainberg
Sr. Director, Engagement
maytal@gofastpay.com
www.gofastpay.com

About Us:
Super G Funding is an alternative lender with over $100MM in committed capital specializing in residual and cash flow loans.  Our mission is to fill the credit void in the lower middle market by providing non-dilutive, senior and subordinated debt solutions to businesses in need of financing for working capital, growth capital, acquisition capital, or special situation financing.  We lend up to $5MM per transaction in the form of a fully-amortizing cash flow term loan with a 6-36 month term (pricing contingent on credit profile).  We are a small, but nimble team and highly responsive. We have over 100+ borrowers around the country and are able to give quick responses and close deals rapidly.