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Debt | 6 Months Ended
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Sep. 30, 2017
Debt Disclosure [Abstract] |
Debt |
7. | Debt
Standby Letters of Credit and Lines of Credit In January 2013, City National Bank (“CNB”) provided to MMG an irrevocable standby letter of credit for $10,000, which was increased to $500,000 in November, 2014. Such letter of credit renews automatically every 5 months. In December 2016, CNB provided to MMG another irrevocable standby letter of credit for $235,000, which expires December 31, 2017. In March 2017, APAACO established an irrevocable standby letter of credit with a financial institution for $6,699,329 for the benefit of CMS, which expires on December 31, 2018 and will be automatically extended without amendment for additional one-year periods, unless terminated by the institution prior to 90 days from the expiration date. The standby letters of credit are typically collateralized by cash deposits, which are included in restricted cash in the amount of $745,176 and $765,058 on the consolidated balance sheets as of September 30, 2017 and March 31, 2017, respectively. BAHA has a line of credit of $150,000 with First Republic Bank. Borrowings thereunder bear interest at the prime rate (as defined) plus 3.0% (7.25% and 7.0% per annum at September 30, 2017 and March 31, 2017, respectively). The Company has an outstanding balance of $25,000 and $62,500 as of September 30, 2017 and March 31, 2017, respectively. The line of credit is unsecured. Restated NMM Note (Related Party) In connection with the proposed Merger, on January 3, 2017, the Company issued a promissory note to NMM in the amount of $5,000,000 (the “NMM Note”). Interest was due quarterly at the rate of prime plus 1% (or 5.25% at September 30, 2017), with the entire principal balance being due on January 3, 2019. In the event of default, as defined, all unpaid principal and interest will become due and payable. In connection with the Merger Agreement Amendment No. 2 (see Note 1 “Overview” above and Note 10 “Subsequent Events” below), on October 17, 2017, the original NMM Note was amended and restated (the “Restated NMM Note”) to include, among others, (i) an additional $4,000,000 to be used for working capital, (ii) an extension of the maturity date to the earlier of (A) March 31, 2019 or (B) 12 months after the date the Merger Agreement is terminated (the “Restated NMM Note Maturity Date”), (iii) the increase in the principal amount of the Restated NMM Note to $13,990,000 if the Company fails to pay the Amended Alliance Note (see “Amended Alliance Note” below), in which case NMM will either pay all amounts owed under the Amended Alliance Note or enter into another agreement with Alliance (such that in either case the Amended Alliance Note is cancelled), and (iv) a conversion feature allowing the Restated NMM Note to be converted into shares of Common Stock at $10.00 per share (subject to adjustment for stock splits, dividends, recapitalizations and the like) with such conversion, if exercised in accordance with the terms of the Restated NMM Note, becoming effective on the maturity date. Under the terms of the Restated NMM Note, the Company must pay NMM successive quarterly installments comprising all accrued and unpaid interest on the principal balance outstanding at the prime rate (as such term is defined in the Restated NMM Note) plus 1%. All outstanding principal and accrued but unpaid interest under the Restated NMM Note is due and payable in full on the Restated NMM Note Maturity Date. The Company may voluntarily prepay the outstanding principal and interest in whole or in part without penalty or premium. Upon the occurrence of an event of default (as such term is defined in the Restated NMM Note), the unpaid principal amount of, and all accrued but unpaid interest on, the Restated NMM Note will become due and payable immediately at the option of NMM. In such event, NMM may, at its option, declare the entire unpaid balance of the Restated NMM Note, together with all accrued interest, applicable fees, and costs and charges, including costs of collection, if any, to be immediately due and payable in cash. Interest expense associated with the outstanding notes payable amounted to $70,243 and $134,336 for the three and six months ended September 30, 2017, respectively. There was no interest on these notes for the three and six months ended September 30, 2016. Amended Alliance Note On March 30, 3017, the Company issued a 6% convertible promissory note to Alliance Apex, LLC (“Alliance”) in the principal amount of $4,990,000 (the “Alliance Note”). On October 16, 2017, the Company and Alliance amended the Alliance Note (the “Amended Alliance Note”) (see Note 10 “Subsequent Events” below). The Amended Alliance Note is due and payable to Alliance on (i) March 31, 2018, or (ii) the date on which the Merger Agreement with NMM is terminated (see Note 1 above), whichever occurs first. Upon the closing of the proposed Merger on or before March 31, 2018, the Amended Alliance Note together with the accrued and unpaid interest, shall automatically be converted into 499,000 shares of Common Stock, at a conversion price of $10.00 per share, subject to adjustment for stock splits, stock dividends, reclassifications and other similar recapitalization transactions. If the Merger is not consummated by March 31, 2018, the Company will be obligated to repay the outstanding principal, together with accrued and unpaid interest, on the Amended Alliance Note within 45 days, which would require a significant amount of cash on hand or the need to raise capital to pay off or refinance the Amended Alliance Note. There can be no assurance that is such event arose, the Company would have sufficient cash on hand to repay the Amended Alliance Note or could raise capital on favorable terms, or at all, to repay the Amended Alliance Note. In the case of an event of default (as defined in the Alliance Note), the entire outstanding principal and all accrued and unpaid interest under the Alliance Note shall automatically become immediately due and payable, without presentment, demand, protest or notice of any kind. If any other event of default occurs and is continuing, Alliance, by written notice to the Company, may declare the outstanding principal and interest under the Alliance Note to be immediately due and payable. After maturity (by acceleration or otherwise), the unpaid balance (both as to principal and unpaid pre-maturity interest) shall bear interest at a default rate equal to the lesser of (a) 3% over the rate of interest in effect immediately prior to maturity or (ii) the then maximum legal rate allowed under the laws of the State of California. Additionally, the Company shall pay all costs of collection incurred by Alliance, including reasonable attorney’s fees incurred in connection with the Alliance’s reasonable collection efforts. These terms equally apply to the Amended Alliance Note. As part of the Merger Agreement Amendments No. 1 and No. 2 (see Note 1 “Overview” above), NMM provided a guarantee for the Alliance Note and Amended Alliance Note, which guarantee was considered a debt issuance cost. The Company estimated the debt issuance cost and related warrants issuable for the debt guarantee of $161,000 based on the incremental fair value to a market participant of a similar but unsecured debt instrument without such guarantee using a market rate for an unsecured high yield note of 12.4% and a 25% probability of the note not being converted. As of September 30, 2017 and March 31, 2017, the debt issuance cost associated with the guarantee was approximately $54,000 and $161,000, respectively, and after being offset against the Alliance Note, resulted in a net balance of approximately $4,936,000 and $4,829,000, respectively.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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