UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 12, 2012
Commission file number 000-51384
INTERMETRO COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
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Nevada
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88-0476779
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(State or other jurisdiction of incorporation)
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IRS Employer Identification No.
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2685 Park Center Drive, Building A,
Simi Valley, California 93065
(Address of principal executive offices) (zip code)
(805) 433-8000
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2 below):
£ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
£ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
£ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act of (17 CFR 240.14d-2(b))
£ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act of (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
Effective October 12, 2012 (the “Closing Date”), InterMetro Communications, Inc., and its subsidiaries (the “Company”): (i) secured a new credit facility with Transportation Alliance Bank, Inc. (“TAB Bank”); (ii) entered into agreements with its existing lender, Moriah Capital, L.P. (“Moriah”) to pay off its debt; and (iii) renegotiated terms with its secured note holders.
The Company has secured a $3,000,000 senior credit facility with TAB Bank pursuant to which the Company is permitted to borrow $3,000,000, up to 85% of its eligible accounts, at any time until the maturity date of September 29, 2014. This facility generally accrues interest at the greater of (i) 9.50% per annum, or (ii) the sum of the lender’s stipulated prime rate plus 6.25%. The Company initially borrowed $1,338,000 from this facility. The loan provides for interest-only monthly payments, is generally secured by all the Company’s assets but subject to certain prior liens, and includes financial covenants pertaining to cash flow coverage of interest and fixed charges and a requirement for a minimum level of tangible net worth.
The Company entered into agreements with Moriah retiring the Company’s existing credit facility by paying Moriah $1,845,000 and issuing a promissory note in favor of Moriah in the principal amount of $987,500, $250,000 of which is due September 30, 2013. The balance, issued in consideration for the cancellation of Moriah’s put option to purchase 6,008,500 shares of the Company’s common stock, becomes due on September 30, 2014. The note accrues interest at the rate of 9% per annum and Moriah may convert the balance owed into shares of common stock with unpaid principal amounts converted at the rate of $0.25 per share and any unpaid accrued interest at the rate of $0.30 per share. Any warrants that were not previously priced at $0.01 per share of common stock were re-priced to $0.01 per share. Any shares of common stock issued to Moriah in accordance with the warrants or its conversion rights are subject to a voting agreement in favor of the Company’s CEO.
Also on the Closing Date, the Company renegotiated terms with its secured note holders which included conversion of certain loan balances to common stock, the issuance of warrants and the establishment of new payment terms. The secured note holders converted $1,521,843 that the Company owed into 10,145,516 shares of common stock at $0.15 per share and the Company issued warrants with a term of seven years to purchase 1,521,843 shares of common stock at an exercise price of $0.01 per share. The remaining outstanding balance of $2,374,281, of which $764,221 is eligible to be converted to common stock at the election of the lenders at a rate of $0.50 per share of common stock, includes $878,466 owed to related parties. This remaining balance will be paid in interest only payments of approximately $12,000 per month from January 1, 2013 through September 1, 2013 followed by principal and interest payments of approximately $69,000 per month from September 1, 2013 until September 30, 2014. Of the remaining balances $923,576 will mature on September 30, 2014 with the final payment of all principal and accrued interest at maturity on December 31, 2014. As part of the renegotiated terms with the secured note holders the Company issued additional warrants with a term of seven years to purchase 2,144,451 shares of common stock at a price of $0.25 per share and 650,000 shares of common stock at a price of $0.01 per share. All the common shares, warrants and conversion rights issued to the secured note holders are subject to a voting agreement in favor of the Company’s CEO. The outstanding balance bears interest at 9% per annum.
Item 2.03 Creation of a Direct Financial Obigation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
See above Item 1.01.
Item 3.02 Unregistered Sales of Equity Securities
See above Item 1.01.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Dated: October 17, 2012
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By:
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/s/ David Olert | |
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David Olert
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Chief Financial Officer
(Principal Accounting Officer)
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