RMG Networks Amends Senior Credit Facility
RMG Networks Holding Corporation, or RMG Networks, a leading provider of technology-driven visual communications solutions, announced it has successfully completed a Third Amendment to its senior credit facility.
The amended term loan facility increases from $8 million to $12 million, adding approximately $3.4 million in net cash proceeds to the company's balance sheet. The amendment also eliminates financial covenants until at least mid-year 2015, providing the Company with substantial operating flexibility. The amended three-year facility, which matures in July 2017, bears interest at a fixed rate of 12% and continues to defer principal payments until maturity.
Prior to the amendment, the company's prior senior lender, Comvest Capital, sold its interest in the credit facility to a new lender group that includes an affiliate of Gregory H. Sachs, RMG Networks' Executive Chairman. After acquiring the credit facility, the new lender group entered into the Third Amendment and funded the $4 million increase in the facility.
Due to the related-party nature of the financing, the company's Board of Directors formed a special committee of independent directors to review and authorize the financing.
Garry McGuire, Chief Executive Officer, commented, "This amended credit facility offers RMG Networks attractive and accommodative terms. Further, the increased liquidity and operating flexibility supports our continued execution of the growth investment programs we began last year."
Sachs commented, "We continue to see tremendous long-term potential in RMG Networks and this amended credit facility will provide the Company additional resources to continue to realize that potential. The financing reaffirms my support and commitment to the Company and its long-term strategic growth plan. In combination with strict cost controls, I believe this financing provides the bridge RMG needs to become cash flow positive and self-sustaining."
RMG Networks helps brands and organizations communicate more effectively using location-based video networks. The company connects brands with target audiences using video advertising networks comprised of over 200,000 display screens, reaching over 100 million consumers each month.