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Debt | 9 Months Ended
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Sep. 30, 2019
Debt Disclosure [Abstract] |
Debt | DEBT Credit facility As of September 30, 2019, borrowings under our revolving line of credit (“Credit Facility”) with Austin Financial Services were $1.3 million and are recorded in the Condensed Consolidated Balance Sheets as a current liability under the caption, “Credit line borrowings.” Unamortized debt issuance costs related to the Credit Facility were $0.1 million at September 30, 2019. These costs are recorded as current and long-term assets on the Condensed Consolidated Balance Sheets and have not been netted against the liability due to immateriality. The borrowing rate as of September 30, 2019 was 7.25%. At September 30, 2019, we had $1.2 million available for us to borrow under the Credit Facility. In September 2019, Austin Financial Services authorized a temporary increase of $0.5 million to the amounts available in our line of credit as it relates to the inventory component of the original Credit Facility agreement. Amounts available to us are based on the amount of our available inventory, which is the lesser of 50 percent of the net realizable value of eligible inventory, or now, $1.0 million. This increase included a fee of $5 thousand which has been recorded as a current asset (in-line with the original debt issuance costs noted above) and will be amortized through February 2020. Additional information regarding our Credit Facility is included in Note 9, “Debt” to our 2018 Annual Report which was filed with the SEC on April 1, 2019. Debt On March 29, 2019, the Company entered into a Note Purchase Agreement with Fusion Park LLC, F&S Electronic Technology (HK) Co., Ltd, Brilliant Start Enterprise Inc., Vittorio Viarengo and Amaury Furmin (collectively the “Investors”) for the purchase of an aggregate $1.7 million in subordinated convertible promissory notes (the “Notes”). The Notes, which were issued to the Investors on March 29, 2019 and amended on May 29, 2019, have a maturity date of December 31, 2021 and bear interest at a rate of 5 percent per annum until June 30, 2019, and at a rate of 10 percent thereafter. The outstanding principal amount of each Note, together with accrued interest (such principal and interest, the “Aggregate Outstanding Amount”), is convertible into shares of Series A Preferred Stock at a “Conversion Rate” determined by the arithmetic average of the volume-weighted average closing price of the Common Stock measured over a specified ten-trading-day period that ended on April 16, 2019, which equaled $0.67 per share. To calculate the number of shares of Series A Preferred Stock into which each Note may convert, the Aggregate Outstanding Amount of such Note will be divided by the Conversion Rate. The Notes will automatically convert into shares of Series A Preferred Stock at the conversion rate on the first business day following the date that the Company’s stockholders approve the transactions contemplated by the Notes, including (a) the issuance of shares of Common Stock upon conversion of the shares of Series A Preferred Stock in excess of the number of shares of Common Stock permitted by NASDAQ Marketplace Rules, and (b) the increase in the number of authorized and available shares of Series A Preferred Stock pursuant to the Company’s Certificate of Incorporation, as amended. The Company has accounted for this equity-linked hybrid instrument in accordance with applicable U.S. GAAP and, per analysis of the terms of the agreement, has determined it to be a debt-related instrument that does not require the equity-linked component to be bifurcated. The Company has recorded the Notes as short-term debt at cost in the amount of $1.7 million, as we expect the Notes to convert in less than 12 months. The issuance costs will be deferred and amortized until such time as the Notes convert. Unamortized debt issuance costs were $54 thousand at September 30, 2019. These costs are recorded as current and long-term assets on the Consolidated Balance Sheets and have not been netted against the liability due to immateriality.

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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://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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