Quarterly report pursuant to Section 13 or 15(d)

Debt

v3.23.1
Debt
 3 Months Ended
Mar. 31, 2023
Debt Disclosure [Abstract]  
Debt

NOTE 9—DEBT

The following table presents the details of the principal outstanding and unamortized discount (in thousands):

 

 

 

March 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

SWK Loan

 

$

14,650

 

 

$

14,650

 

EIDL Loan

 

 

150

 

 

 

150

 

Discount and debt issuance costs on SWK Loan

 

 

(904

)

 

 

(1,009

)

Total

 

 

13,896

 

 

 

13,791

 

Current term loans, net of discount

 

 

1,400

 

 

 

700

 

Non current term loans, net of discount

 

$

12,496

 

 

$

13,091

 

 

The Company recognized approximately $0.6 million and $0.4 million in interest expense for the three months ended March 31, 2023 and 2022, respectively. The weighted-average interest rate as of March 31, 2023 was 13.84%.

The future minimum principal and interest payments as of March 31, 2023 are as follows (in thousands):

 

 

 

Principal

 

 

Interest (1)

 

Remainder of 2023

 

$

700

 

 

$

1,393

 

2024

 

 

2,800

 

 

 

1,623

 

2025

 

 

11,150

 

 

 

712

 

2026

 

 

—

 

 

 

9

 

2027 and thereafter

 

 

150

 

 

 

89

 

Total future payments

 

$

14,800

 

 

$

3,826

 

 

 

 

 

 

 

 

(1) Estimated using London Interbank Bank Offered Rate (“LIBOR”) as of March 31, 2023

 

 

 

 

 

 

Term Loan

On November 9, 2018, the Company entered into a five-year secured Credit Agreement (as amended, restated, and supplemented from time to time, the “Credit Agreement”) with SWK Funding LLC (“SWK”), pursuant to which the Company has borrowed $14.3 million (“SWK Loan”) as of March 31, 2023. The Company’s obligations under the Credit Agreement are secured by substantially all of the Company’s assets. Under the terms of the Credit Agreement and subsequent amendments as discussed in the Company’s 2022 Form 10-K, repayment of the SWK Loan is interest-only for the first two years, paid quarterly with the option to extend the interest-only period. Principal repayments were to begin in the first quarter of 2021. On June 30, 2022 the Company entered into the ninth amendment to the Credit Agreement (the "Ninth Amendment"), which extended the interest-only period by two quarters from May 2023 to November 2023. On December 30, 2022, the Company entered into the tenth amendment to the Credit Agreement, which lowered the required minimum consolidated unencumbered liquid assets from $3 million to $2.5 million and removed the conditional minimum last twelve months aggregate revenue and EBITDA as of the end of the twelve-month period ended December 31, 2022. In connection with the Ninth Amendment, the Company prepaid $1.0 million of the outstanding loan balance. Principal repayments begin in November 2023 and will be approximately $0.7 million quarterly until the SWK Loan matures in May 2025. The loan bears interest of 9% plus LIBOR with a floor of 1.25% or another index that approximates LIBOR as close as possible if and when LIBOR no longer exists.

As of March 31, 2023, the Company was in compliance with the debt covenants of the Credit Agreement.

EIDL Loan

On May 22, 2020, the Company executed the standard loan documents required for securing a loan (the “EIDL Loan”) from the Small Business Administration (the "SBA") under its Economic Injury Disaster Loan assistance program in light of the impact of the COVID-19 pandemic on the Company’s business. The principal amount of the EIDL Loan is $150,000, with the proceeds to be used for working capital purposes. Interest on the EIDL Loan accrues at the rate of 3.75% per annum, and installment payments, including principal and interest, are due monthly beginning in July 2021 and are payable through July 2050. In April 2021, the SBA announced

that it was extending the first payment due date for all loans until 2022, or 24 months from the loan execution date. In March 2022, the SBA announced that it was extending the first payment due date for all loans an additional six months, or 30 months from the loan execution date. The Company began making payments on the EIDL Loan starting in November 2022. Fixed payments are first applied to any accrued interest.