Quarterly report pursuant to Section 13 or 15(d)

DEBT AND INTEREST EXPENSE

v3.23.1
DEBT AND INTEREST EXPENSE
 3 Months Ended
Mar. 31, 2023
DEBT AND INTEREST EXPENSE  
DEBT AND INTEREST EXPENSE

NOTE 13. DEBT AND INTEREST EXPENSE

The Company’s debt obligations at March 31, 2023 and December 31, 2022 were as follows:

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March 31, 2023

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Net

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Principal

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Unamortized

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Carry

($’s in thousands)

    

Balance

    

Discount & Fees

    

Amount

EWB Revolving LOC

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$

3,000

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$

—

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$

3,000

EWB Term Loan (Short-term)

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10,000

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86

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9,914

Total Short-Term Debt

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$

13,000

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$

86

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$

12,914

EWB Term Loan (Long-term)

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$

10,000

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$

71

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$

9,929

Total Debt & Obligations

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$

23,000

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$

157

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$

22,843

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December 31, 2022

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Net

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Principal

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Unamortized

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Carry

($’s in thousands)

    

Balance

    

Discount & Fees

    

Amount

Deferred cash payment

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$

5,000

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$

9

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$

4,991

EWB Revolving LOC

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2,948

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—

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2,948

Total Short-Term Debt

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$

7,948

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$

9

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$

7,939

EWB Term Loan (Long-term)

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$

20,000

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$

174

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$

19,826

Total Debt & Obligations

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$

27,948

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$

183

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$

27,765

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East West Bank Line of Credit and Long-Term Debt

The Company is party to the EWB Facility with EWB, under which EWB originally made a $7.5 million revolving line of credit available to the Company. On January 12, 2022, the Company entered into an amendment of the loan and security agreement with EWB that increased the borrowing capacity of the Company’s revolving line of credit to an amount equal to $10.0 million, of which $3.0 million was outstanding at March 31, 2023, and added a term loan not to exceed $20.0 million. Both the revolving line of credit and the term loan were to mature on January 12, 2026. In January 2022 and August 2022, the Company borrowed $15.0 million and $5.0 million, respectively, against the term loan. On May 16, 2023, the Company entered into the 2023 Amendment that effected several changes to the EWB facility. Under the 2023 Amendment, the Company paid down $10.0 million of the term loan upon the closing of the 2023 Amendment. The term loan previously contained an interest-only payment period through January 12, 2024, after which the outstanding

balance of the term loan was to have been payable in equal monthly installments of principal, plus all accrued interest, through the term loan maturity date. The 2023 Amendment revised the maturity date of the term loan from January 12, 2026 to July 1, 2024 and provides that the Company is no longer required to make monthly installments of principal of the term loan, and instead, is required to make interest-only payments until the maturity date, at which time all principal and all accrued but unpaid interest will be due. The Company may prepay all or any part of the term loan without penalty or premium, but may not re-borrow any amount once repaid. The 2023 Amendment removed the revolving line of credit from the EWB Facility effective as of the date of the 2023 Amendment. There were no amounts outstanding under the revolving line of credit as of the date of the 2023 Amendment. Under the 2023 Amendment, the $10.0 million remaining term loan balance is due on the new maturity date of July 1, 2024 and the Company will maintain a minimum required cash balance of $8.75 million in deposit accounts with EWB, which increases to $10.0 million on August 31, 2023.

Interest expense and financing fees

Interest expense for the three-month periods ended March 31, 2023 and 2022 consisted of the following:

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Three-months ended March 31,

($’s in thousands)

    

2023

    

2022

Interest payments on EWB term loan and LOC

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$

535

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$

161

Amortization/Accretion

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33

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80

Imputed interest on acquired intangible assets

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82

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148

Total Interest Expense and Financing Fees

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$

650

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$

389

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