Quarterly report pursuant to Section 13 or 15(d)

Debt

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Debt
 3 Months Ended
Mar. 31, 2024
Debt Disclosure [Abstract]  
Debt
Note F – Debt
The table below presents details of the Company’s debt as of the following periods and the effective interest rate as of March 31, 2024:
  Effective interest rate March 31, 2024 December 31, 2023
Adams Street Term Loan
 12.20  % $ 30,444  $ 30,522 
Adams Street Revolving Credit Facility
 14.89  15,000  12,000 
Adams Street Delayed Draw Term Loan
 12.19  14,731  14,769 
Adams Street Incremental Term Loan
 12.09  31,508  31,588 
D&O Financing Loans —  —  598 
Total debt
 91,683  89,477 
Less: unamortized discounts and issuance costs
 1,161  1,257 
Total debt, net
 90,522  88,220 
Less: Short-term debt, including current portion of long-term debt
 780  1,378 
Total long-term debt, net
 $ 89,742  $ 86,842 
Adams Street 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 March 31, 2024. 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 $30.0 million revolving credit facility commitment, all of which mature on October 28, 2026. During the three months ended March 31, 2024, the Company borrowed $5.0 million and repaid $2.0 million on the revolving credit facility. As of March 31, 2024, the Company had $15.0 million of borrowings outstanding under the Company’s revolving credit facility and the remaining capacity was $15.0 million.

As of March 31, 2024, 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 March 2022, AE Industrial Partners Fund II, LP (“AEI”) and certain of its affiliates (the “AEI Guarantors”), provided a limited guarantee for the payment of outstanding revolving loans in excess of $10.0 million, with a $15.0 million cap in the aggregate. In the event that the AEI Guarantors are required to make payments to the lenders under the Adams Street Credit Agreement pursuant to the terms of the limited guarantee, each AEI Guarantor would be subrogated to the rights of the lenders. In connection with the limited guarantee, the Company agreed to pay to the AEI Guarantors a fee equal to 2% of any amount actually paid by such guarantors under the limited guarantee. The fee is waivable by the AEI Guarantors at their discretion.
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 resumed with the fiscal quarter ending December 31, 2023. In addition, the Company was 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, is no longer in effect and the Company is required to comply with the consolidated total net leverage ratio as of March 31, 2024.

There was no accrued PIK interest on the Adams Street Credit Agreement recorded during the three months ended March 31, 2024 and $0.4 million recorded during the three months ended March 31, 2023.

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.

In December 2023, the Company entered into a Seventh Amendment to the Adams Street Credit Agreement, in which the commitments under the revolving credit facility increased from $25.0 million to $30.0 million.

The Adams Street 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 March 31, 2024 and December 31, 2023, the Company was in compliance with its covenant requirements, as amended.

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. In March 2024, the Company repaid the full outstanding principal and interest on the 2023 D&O Financing Loan.