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Notes Payable | 12 Months Ended
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Dec. 31, 2018
Debt Disclosure [Abstract] |
Notes Payable |
(7) | Notes Payable
The components of notes payable and long-term debt at December 31, 2018 and 2017 are as follows:
| 2018 |  |  | 2017 |
| (In thousands) |
Short-term note payable | $ | 202 |  |  | $ | 203 |
Current portion of long-term notes payable |  | - |  |  |  | 270 |
Long-term notes payable |  | - |  |  |  | 6,230 |
Principal balance of notes payable |  | 202 |  |  |  | 6,703 |
Warrants issued as part of debt refinancing |  | - |  |  |  | (365) |
Loan cost capitalization |  | - |  |  |  | (341) |
Total notes payable, net | $ | 202 |  |  | $ | 5,997 |
Principal payments of the short-term notes payable are due in 2019. On March 23, 2017, the Company and its subsidiaries, M&I Electric Industries, Inc. and South Coast Electric Systems, LLC (collectively, the “Sellers”) issued and sold to HD Special-Situations III, L.P. (the “Purchaser”) a $7.00 million principal amount Senior Secured Term Note (the “Note”) with principal of $0.50 million due and paid on June 30, 2017 with the balance due 48 months after issuance for cash at par pursuant to a Note Purchase Agreement (the “Purchase Agreement”). Proceeds from the sale of the Note were used to fully repay and terminate the Company’s prior revolving credit facilities with approximately $1.00 million being available for the Company’s working capital and general business purposes. The Note bore interest at 11.5% per annum payable monthly in arrears and was secured by a first-priority lien on substantially all existing and after-acquired personal property assets and real estate owned by the Sellers (with certain exceptions). The Note was subject to an interest “make-whole” provision under which any prepayment of principal in excess of $1.50 million (the “Prepayment Threshold”) within one year of the date of issuance (the “Make-Whole Period”) would have been subject to the payment premium based on an interest rate of 11.5% per year of the prepayment amount in excess of the Prepayment Threshold for the remaining portion of the Make-Whole Period that would have remained after the prepayment was made. In connection with the Transaction described in Note 16, after the Make-Whole Period on August 12, 2018, the Company was required to repay the Notes and all accrued and unpaid interest totaling $6.4 million. The repayment resulted in an immediate recognition of unamortized loan costs of $0.3 million and unamortized debt discount related to warrants issued in a debt modification, as described below, of $0.4 million, into interest expense totaling $0.7 million. On November 13, 2017, the Company entered into an agreement modifying the terms of the Note. The modification included a waiver of an EBITDA covenant violation as of September 30, 2017 and revisions to the original revenue and EBITDA covenants along with the requirement of minimum principal reductions of $30,000 per month beginning in April 2018. In consideration for the modified terms, the Company issued 500,000 warrants to purchase the Company’s common stock at an exercise price of $2.26 that expire in November 2022. The fair value assigned to the warrants of approximately $0.4 million was recognized as an increase in additional paid-in-capital with a corresponding discount on the Note. The discount was originally accreted through interest expense over the remaining term of the Note; however, as described above, the unamortized discount was immediately recognized as interest expense upon repayment of the Note on August 12, 2018. The fair value of the warrants was calculated using the Black Scholes-Merton pricing model using the following weighted average assumptions, at the grant date:
Number of warrants |  | 500,000 |
Exercise price | $ | 2.26 |
Expected volatility of underlying stock |  | 72 | %
Risk-free interest rate |  | 2.08 | %
Dividend yield |  | 0 | %
Expected life of warrants |  | 5 years |
Weighted-average fair value of warrants | $ | 0.73 |
Expiration date |  | November 13, 2022 |
On June 6, 2017, the Company’s subsidiary, M&I Brazil, entered into a Loan Agreement with the former chairman of AETI. The Loan Agreement provides the Company with a $0.30 million loan facility of which $0.20 million is drawn and is outstanding as of December 31, 2018. All outstanding amounts, including accrued but unpaid interest are due at maturity in June 2019. Under the loan agreement, the interest rate on the loan facility is 10.0%, per annum, payable each quarter. The loan facility is secured by the assets held by M&I Brazil.

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- Definition The entire disclosure for debt and capital lease obligations can be reported. 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. Also includes descriptions and amounts of capital leasing arrangements that consist of direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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