Quarterly report pursuant to Section 13 or 15(d)

Debt

v3.23.3
Debt
 9 Months Ended
Sep. 30, 2023
Debt Disclosure [Abstract]  
Debt
Note G – Debt
The table below presents details of the Company’s debt as of the following periods and the effective interest rate as of September 30, 2023:
  Effective interest rate September 30,
2023		 December 31,
2022
Adams Street Term Loan
 12.25  % $ 30,600  $ 30,626 
Adams Street Revolving Credit Facility
 16.35  5,000  — 
Adams Street Delayed Draw Term Loan
 12.25  14,806  14,819 
Adams Street Incremental Term Loan
 12.15  31,668  31,695 
D&O Financing Loans 2.17  1,196  1,798 
Total debt
 83,270  78,938 
Less: unamortized discounts and issuance costs
 1,351  1,615 
Total debt, net
 81,919  77,323 
Less: Short-term debt, including current portion of long-term debt
 1,976  2,578 
Total long-term debt, net
 $ 79,943  $ 74,745 
Adams Street Capital Credit Agreement
On October 28, 2020, the Company entered into a credit agreement with Adams Street Capital (the “Adams Street Credit Agreement”), the terms of which were subsequently modified by various amendments through September 30, 2023. As amended, the Adams Street Credit Agreement includes (i) a $31.0 million term loan commitment, (ii) a $15.0 million delayed draw term loan, (iii) a $32.0 million incremental term loan, and (iv) a $25.0 million revolving credit facility commitment, all of which mature on October 28, 2026. During the three and nine months ended September 30, 2023, the Company borrowed $11.0 million and $22.5 million, respectively, and repaid $6.0 million and $17.5 million, respectively, on the revolving credit facility. As of September 30, 2023, the Company had $5.0 million of borrowings outstanding under the Company’s revolving credit facility and the remaining capacity was $20.0 million.

As of September 30, 2023, the outstanding principal on the Adams Street Credit Agreement incurs cash interest in accordance with the prime rate plus the applicable rates as set forth in the table below:

  Eurocurrency Rate Base Rate
Term loans
 6.00  % 5.00  %
Revolving credit facility:
Aggregate principal of $5.0 million or less
6.00  5.00 
Aggregate principal in excess of $5.0 million
 7.50  6.50 
As amended in August 2022, the outstanding principal on the term loans and revolving loans under the Adams Street Credit Agreement incurs additional interest to be paid-in-kind (“PIK”) of 2.00% per annum, which is accrued and added to the outstanding principal balance until the Company is in compliance with the consolidated total net leverage ratio. The requirement to comply with the consolidated total net leverage ratio was suspended through September 30, 2023, and such compliance resumes with the fiscal quarter ending December 31, 2023. In addition, the Company is required to maintain a minimum liquidity covenant of $5.0 million measured on the last day of each fiscal month commencing with the month ending September 30, 2022 through September 30, 2023. During the second quarter of 2023, in accordance with the provisions of the Adams Street Credit Agreement, as amended, the Company met certain requirements to end the incremental 2.00% per annum PIK interest, effective May 1, 2023. The previously suspended requirement to comply with the consolidated total net leverage ratio as discussed above, remains in effect as of September 30, 2023.

There was no accrued PIK interest on the Adams Street Credit Agreement during the three months ended September 30, 2023 and $0.5 million during the nine months ended September 30, 2023, respectively. During the three and nine months ended September 30, 2022, total accrued PIK interest on the Adams Street Credit Agreement was $0.3 million, respectively.

Additionally, in June 2023, the Company entered into the Sixth Amendment to the Adams Street Credit Agreement, in which the LIBOR-based interest rate applicable to borrowings under the Adams Street Credit Agreement was replaced with a SOFR-based interest rate in advance of the cessation of LIBOR which occurred on June 30, 2023.

The Adams Street Capital Credit Agreement, as amended, contains certain customary representations and warranties, affirmative and other covenants and events of default, including among other things, payment defaults, breach of representations and warranties, and covenant defaults.

As of September 30, 2023 and December 31, 2022, the Company was in compliance with its covenant requirements, as amended.

D&O Financing Loan
On September 3, 2021, the Company entered into a $3.0 million loan (the “2021 D&O Financing Loan”) with BankDirect Capital Finance to finance the Company’s directors and officers insurance premium. The 2021 D&O Financing Loan had an interest rate of 1.74% per annum and a maturity date of May 3, 2022. In May 2022, the Company repaid the full outstanding principal and interest on the 2021 D&O Financing Loan.

On September 3, 2022, the Company entered into a $2.7 million loan with AFCO Credit Corporation (the “2022 D&O Financing Loan”) to finance the Company’s directors and officers insurance premium. The 2022 D&O Financing Loan had an interest rate of 4.59% per annum and a maturity date of June 3, 2023. In June 2023, the Company repaid the full outstanding principal and interest on the 2022 D&O Financing Loan.
On September 3, 2023, the Company entered into a $1.2 million loan with AFCO Credit Corporation (the “2023 D&O Financing Loan”) to finance the Company’s directors and officers insurance premium. The 2023 D&O Financing Loan has an interest rate of 7.39% per annum and a maturity date of March 3, 2024.