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Subsequent Events
3 Months Ended
Mar. 31, 2020
Subsequent Events [Line Items]  
Subsequent Events [Text Block]

Note 15 Subsequent Events


The Company has evaluated events and transactions subsequent to March 31, 2020 and through the date these Condensed Consolidated Financial Statements were included in this Form 10-Q and filed with the SEC.


On April 23, 2020, the Company entered into a loan note (the “Loan Note”) with Enterprise Bank and Trust (“Lender”) as lender under the CARES Act of the Small Business Administration of the United States of America (“SBA”), dated as of April 20, 2020.  Under the Loan Note, the Company borrowed $810,800 from Lender under the Payment Protection Program (“PPP”) included in the SBA’s CARES Act.  The Loan Note proceeds are forgivable after eight weeks as long as the Company uses the loan proceeds for eligible purposes including payroll costs, including salaries, commissions, and similar compensation, group health care benefits, and paid leave; rent; utilities; and maintains its payroll levels.  The amount of the loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight week period.  The unforgiven portion of the PPP loan is payable over two years at an interest rate of 1.00%, with a deferral of payments for the first six months.  While the Company believes that its use of the loan proceeds will meet the conditions of forgiveness of the loan, we cannot assure you that we will not take actions that could cause the Company to be ineligible for forgiveness of the loan, in whole or in part.


On April 14, 2020, the Company accepted the resignation of Alberto Shaio, the Company’s President and Chief Executive Officer.  In connection with Mr. Shaio’s departure, the Company appointed Nicholas J. Fazio to be the Company’s Interim Chief Executive Officer.


On June 3, 2020, the Company and MidCap entered into a modification agreement to the Loan Agreement.  See Note 7 – Long-Term Debt for further details.


On June 4, 2020, the Company entered into a Contract Manufacturing Agreement (the “CMA”) with Craftsmen Industries Inc. (“Craftsmen”).  The CMA commenced June 15, 2020 and the initial term terminates December 31, 2020.  The CMA allows for renewal terms of 180 days each.  Under the CMA, Craftsmen shall manufacture and supply goods and provide all necessary labor, materials, management expertise, and oversight necessary to manufacture the goods at the Company’s manufacturing facility located in Hazelwood, Missouri.  The Company shall provide Craftsmen assistance to the manufacturing process, the technical details as well as the amount of goods to be produced.  The CMA provides that all payments owed by the Company to Craftsmen under the CMA are secured by a second lien on company assets and have been guaranteed by Unilumin USA LLC (“Unilumin USA”).  Unilumin USA is wholly owned by Unilumin North America, who owns 52% of the Company’s outstanding Common Stock.


In connection with the Unilumin Guarantee in the CMA, the Company issued warrants (the “Warrants”) to purchase 4,000,000 shares of the Company’s Common Stock to Unilumin USA at an exercise price of $1.00 per share.  The Warrants are exercisable until June 4, 2024.


On July 2, 2020, the Company and the City of Hazelwood agreed to a termination of the loan and a forgiveness of all accrued interest.  See Note 7 – Long-Term Debt for further details.