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Note 21 - Subsequent Events - CEO Departure, Goodwill and Covenant Compliance | 12 Months Ended
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Dec. 31, 2014
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21. | Subsequent Events – CEO Departure, Goodwill and Covenant Compliance
CEO Departure On February 2, 2015, the Company announced that Peter MacKenna, formerly the Company’s President & Chief Executive Officer and a director, had left the Company effective January 31, 2015, with Paul J. Varello, the Chairman of the Board of Directors, being named acting Chief Executive Officer effective February 1, 2015. The Company expensed $1.8 million in February 2015 related to severance received by Mr. MacKenna. Goodwill On January 27, 2015, the Company announced its preliminary fourth quarter and full year 2014 results and that the Company was not in compliance with the Credit Facility’s tangible net worth covenant. The Company believes these announcements negatively impacted the Company’s stock price which decreased from $5.52 on January 26, 2015 to $3.97 on January 27, 2015 and has not yet recovered. Due to the decrease in the stock price, the Company noted that a goodwill impairment triggering event may have occurred in January 2015. Covenant Compliance As a result of the fourth quarter loss, the Company was not in compliance with the tangible net worth covenant related to the Company’s Credit Facility at December 31, 2014. On March 12, 2015, the Company obtained a waiver and amendment (the “Seventh Amendment”) which included the following key modifications:
· | A reduction in our availability of $5 million for total availability of $35 million as of March 12, 2015;
· | A reduction in our availability of $10 million at June 1, 2015, for total availability of $25 million;
· | A reduction in our availability of $10 million at September 1, 2015, for total availability of $15 million;
· | An increase in our annual interest rate from the prime rate plus 150 basis points, or 4.75%, to the prime rate plus 350 basis points, or 6.75%;
· | The tangible net worth covenant is modified to include $11.3 million of available headroom from the $86.3 million of tangible net worth calculated at December 31, 2014;
· | Our first covenant test will begin at the end of April using April annualized figures; and
· | A fee of $0.4 million is due in four equal payments. The first payment was due upon execution of the Seventh Amendment and the second, third and fourth payments are due on June 30th, September 30th, and December 31st of 2015, respectively. However, any remaining unpaid fees are waived if at any point during the year the Company liquidates and terminates the Credit Facility a month before a payment becomes due.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References No definition available. + Details
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