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SUBSEQUENT EVENTS | 12 Months Ended
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Mar. 31, 2014
SUBSEQUENT EVENTS |
SUBSEQUENT EVENTS | NOTE 19 — SUBSEQUENT EVENTS On May 30, 2014, we and Ranor entered into a Loan and Security Agreement, or the LSA, with Utica Leasco, LLC, or Utica. Pursuant to the LSA, Utica agreed to loan $4.15 million to Ranor under a Credit Loan Note, which is collateralized by a first secured interest in certain machinery and equipment at Ranor. Payments under the LSA and Credit Loan Note are due in monthly installments with an interest rate on the unpaid principal balance of the Credit Loan Note equal to 7.5% plus the greater of 3.3% and the six-month LIBOR interest rate, as described in the Credit Loan Note. Ranor’s obligations under the LSA and Credit Loan Note are guaranteed by the Company. Pursuant to the LSA, Ranor is subject to certain restrictive covenants which, among other things, restrict Ranor’s ability to (1) declare or pay any dividend or other distribution on its equity, purchase or retire any of its equity, or alter its capital structure; (2) make any loan or guaranty or assume any obligation or liability; (3) default in payment of any debt in excess of $5,000 to any person; (4) sell any of the collateral outside the normal course of business or (5) enter into any transaction that would materially or adversely affect the collateral or Ranor’s ability to repay the obligations under the LSA and Credit Loan Note. The restrictions of these covenants are subject to certain exceptions specified in the LSA and in some cases may be waived by written consent of Utica. Any failure to comply with the covenants outlined in the LSA without waiver by Utica or certain other provisions in the LSA would be an event of default, pursuant to which Utica may accelerate the repayment of the loan. In connection with the execution of the LSA, the Company paid approximately $0.24 million in fees and associated costs and utilized approximately $2.65 million to pay off debt obligations owed to the Bank under the Loan Agreement described below. Additionally, the Company retained approximately $1.27 million for general corporate purposes. On May 30, 2014, the Company and the Bank entered into a new forbearance and modification agreement. Under the Forbearance Agreement, the Bank has agreed to forbear from exercising certain of its rights and remedies arising as a result of the Company’s non-compliance with certain financial covenants under the Loan Agreement commencing retroactively on April 1, 2014 and extending until no later than June 30, 2014. On May 29, 2014, the Company filed a Demand for Arbitration against a customer, GTAT Corporation, for breach of contractual duties set forth pursuant to Rule R-4 of the Commercial Rules of the American Arbitration Association in accordance with the Terms and Conditions of the purchase agreement, dated November 8, 2013, between the parties. The claim was filed by the Company in response to GTAT Corporation’s request in April to reduce the number of units ordered under the purchase agreement. The basis for the Company’s claim is detrimental reliance on the purchase order and subsequent modifications by the respondent during the course of production as evidenced by its purchased materials, personnel hires, units shipped, and other incurred costs. The parties negotiated but were not able to resolve the dispute under the terms of the contract. As such, the Company submitted the dispute to binding arbitration. The Company seeks to recover damages, together with attorney’s fees, interest and costs. On June 23, 2014, Alexander Shen was appointed as President of our Ranor, Inc. subsidiary. Pursuant to the Shen Employment Agreement, Mr. Shen will: (i) receive an annual base salary of $275,000; (ii) receive an award of stock options to purchase shares of the Company’s common stock, granted pursuant to the 2006 Plan, as amended, with a Black Scholes value of $250,000 at the time of grant; and (iii) be eligible for an annual cash performance bonus of up to 50% of base salary, subject to goals and objectives set by the Board of Directors of the Company. Under the Shen Employment Agreement, Mr. Shen also will be eligible to participate in the Company’s benefits provided to other senior executives as well as benefits available to Company employees generally. On June 25, 2014, in connection with a shareholder transaction, Series A Convertible Preferred Stock of 550,000 shares were converted into 718,959 shares of common stock. On July 1, 2014, the Company and the Bank entered into a new forbearance and modification agreement. Under the Forbearance Agreement, the Bank has agreed to forbear from exercising certain of its rights and remedies arising as a result of the Company’s non-compliance with certain financial covenants under the Loan Agreement commencing on July 1, 2014 and extending until no later than July 31, 2014.

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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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