Glowpoint, Inc., a managed service provider of video collaboration and network applications, announced that on July 31, 2017, the company completed a recapitalization of its existing debt obligations with support from Western Alliance Bank and Super G. The new financing eliminated $9,362,000 of debt and accrued interest obligations and reduced the Company’s outstanding common stock by 385,517 shares. As of July 31, 2017, there were no remaining obligations related to the Main Street Term Loan or SRS Note. As of July 31, 2017, there were no remaining obligations related to the Main Street Term Loan or SRS Note.

The Company expects that the Debt Recapitalization resulted in an increase of approximately $8,700,000 to stockholders’ equity on the Company’s balance sheet as of July 31, 2017. Therefore, the Company expects to meet the continued listing standards of the NYSE American Company Guide relating to stockholders’ equity (as previously described in the Company’s Form 8-K filed on June 1, 2017), subject to the Company reporting two consecutive quarters of being in compliance with such standards. The following tables summarize the impact of the Debt Recapitalization on the Company’s debt obligations and outstanding common stock as of July 31, 2017: 

“Completing this critical phase of debt restructuring provides the Company a foundation to re-align capital structure and market opportunity. Having materially eliminated outstanding debt obligations by over 80%, we now look forward to focusing on product development and expanding our market-leading support platform for video collaboration through the addition of cognitive services and advanced analytics,” said Glowpoint President and CEO Peter Holst.

“We are very pleased to have completed this Debt Recapitalization, which eliminated $9.36 million of debt obligations and resulted in a significant improvement to our working capital position as of July 31, 2017. The Debt Recapitalization resulted in significant accretion to shareholder value as it is expected to increase our stockholders’ equity balance by approximately $8.7 million and reduced our outstanding common stock by approximately 386,000 shares as of July 31, 2017,” said Glowpoint CFO David Clark.

Western Alliance Bank Business Financing Agreement

On July 31, 2017, the Company and its subsidiary entered into a senior secured Business Financing Agreement with Western Alliance Bank, as lender (the “Western Alliance Bank Loan Agreement“). The Western Alliance Bank Loan Agreement provides the Company with up to a total of $1,500,000 of revolving loans. On July 31, 2017, the Company received a loan in an amount equal to $1,100,000 under the Western Alliance Bank Loan Agreement, the proceeds of which were used to fund the Main Street Payoff.  See further description of the terms of the Western Alliance Bank Loan Agreement in the Company’s Form 8-K filed on August 1, 2017.  

Super G Loan Agreement

On July 31, 2017, the Company and its subsidiary entered into a Business Loan and Security Agreement with Super G Capital, LLC (“Super G”), as lender (the “Super G Loan Agreement”) and received a term loan from Super G in an amount equal to $1,100,000, the proceeds of which were used to fund the Main Street Payoff. The Super G Loan is subordinate to the Western Alliance Bank borrowings. See further description of the terms of the Super G Loan Agreement in the Company’s Form 8-K filed on August 1, 2017.