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Notes Payable | 9 Months Ended
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Oct. 30, 2021
Debt Disclosure [Abstract] |
Notes Payable | NOTE 11. Notes Payable Notes payable consisted of the following as of the dates presented (in thousands):
|  | October 31, 2021 (unaudited) |  |  | January 30, 2021 |
6% promissory note due February 17, 2024 |  | $ | 1,250 |  |  | $ | 1,250 |
1% promissory note due April 16, 2022 |  |  | — |  |  |  | 3,098 |
1% promissory note due March 10, 2026 |  |  | 2,000 |  |  |  | — |
Total face amount |  |  | 3,250 |  |  |  | 4,348 |
Amount classified as current |  |  | 178 |  |  |  | 2,478 |
Amount classified as long-term |  | $ | 3,072 |  |  | $ | 1,870 |
On September 25, 2019, in connection with the acquisition of Simply Mac, the Company issued a $7,858,000 secured promissory note to GameStop. The note bore interest at a rate equal to 12% per annum and called for the Company to make four equal installment payments of $1,965,000, plus accrued interest, on each 3-month anniversary of the note. The note was secured by, among other things, the Simply Mac inventory and accounts receivable. The first installment payment was due on December 25, 2019, but the Company was unable to make the payment. Consequently, at December 31, 2019, the note was in default, and GameStop provided the Company with an official Notice of Default on January 15, 2020. On March 11, 2020, the Company and GameStop entered into an agreement to amend and restate the promissory note. The amended promissory note reduced the principal balance of the note from $7,858,000 to $1,250,000, reduced the interest rate to 6% per annum and extended the maturity date to February 17, 2024. Additionally, the amended note released all prior security and collateral under the original note and is unsecured. The parties also entered into a Termination Agreement, whereby the Company agreed to pay GameStop an aggregate amount of $335,152, payable in twelve equal monthly installments of $27,929 with the first installment due April 30, 2020, in satisfaction of certain post-closing amounts owed to GameStop under the Stock Purchase Agreement and certain agreements related thereto, less amounts owed to the Company from GameStop under the Stock Purchase Agreement relating to the post-closing working capital adjustment thereunder. The Company also made a onetime cash payment of $250,000 to GameStop and released to GameStop $345,000 of funds held in escrow in connection with the Simply Mac acquisition. As a result of these agreements, the Company recorded a gain of $6,961,000 on the extinguishment of debt. All installment payments were fully made by the Company on a timely basis. On April 16, 2020, the Company secured a $3,098,000, 2-year loan from a regional bank (the “Lender”) pursuant to the U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) under Title I of the Coronavirus Aid, Relief, and Economic Security Act passed by Congress and signed into law on March 27, 2020 (“CARES Act”). The note bears interest at 1.0% per annum and no payments were due for the first six months. In accordance with the applicable provisions of the CARES Act, on October 19, 2020, the Company filed its forgiveness application (the “Application”) with the Lender. The Company certified in the Application that 100% of the loaned funds were utilized during the 24-week covered period commencing April 16, 2020 to pay for qualified payroll and payroll related costs, and as such, requested that the entire principal balance be forgiven. The Application was approved by the lender and the SBA, and the loan with accrued interest was extinguished on August 17, 2021. On March 10, 2021, the Company secured a second-draw, $2,000,000, 1.0%, 5-year loan from the Lender pursuant to the PPP. No payments are due on this loan until the earlier of: (a) the date on which the amount of loan forgiveness determined under the CARES Act is remitted to the Lender by the SBA, (b) the date that the SBA advises Lender that all or part of the loan has not been forgiven, provided that the Company has applied for forgiveness within 10 months of the end of the forgiveness period of the loan or (c) if the Borrower fails to apply for forgiveness by the end of the forgiveness period, a date that is not earlier than the date that is 10 months after the last day of the forgiveness period. In accordance with the applicable provisions of the CARES Act, on October 28, 2021, the Company filed its forgiveness application with the Lender. The Company certified in the application that 100% of the loaned funds were utilized during the 22-week covered period commencing March 10, 2021 to pay for qualified payroll and payroll related costs, and as such, requested that the entire principal balance be forgiven. The application is subject to review by both the Lender and the SBA, after which the Company will be notified as to whether the application is approved. If the application is denied or partially approved, the Company will be required to make equal monthly payments to fully amortize any remaining balance by March 10, 2026. Interest expense for notes payable for the 13 and 39 weeks ended October 30, 2021 was $25,000 and $86,000, respectively. Interest expense for the 13 and 39 weeks ended October 31, 2020 was $34,000 and $325,000, respectively. Derivative Liability: As discussed in Note 13, during March 2020 the Company completed a debt restructuring that resulted in the conversion of then outstanding convertible notes and warrants into common stock. Because the conversion features and warrants did not have fixed conversion or exercise prices, they were recorded as derivative liabilities. The derivative liabilities were marked-to-market at March 31, 2020, the date the underlying notes were exchanged. The exchange resulted in a decrease in value of $543,000 at March 31, 2020 that was recorded as other income for the 39 weeks ended October 31, 2020.

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