XML 19 R8.htm IDEA: XBRL DOCUMENT v3.21.2
Note 2 - Long-term Debt
 6 Months Ended
Jun. 30, 2021
Notes to Financial Statements  
Debt Disclosure [Text Block]

NOTE 2 – LONG-TERM DEBT

 

The carrying value of the Company’s Senior Secured Debt approximates fair value. The fair value of the Company’s Senior Secured Debt (Level 2) is determined based on an estimation of discounted future cash flows of the debt at rates currently quoted or offered to the Company by its lenders for similar debt instruments of comparable maturities by its lenders.

 

In March 2020, the Company entered into an agreement that provided it the right, at its option, to extend the contractual May 25, 2021 maturity of its Senior Secured Debt of approximately $83.1 million as of June 30, 2021 until May 25, 2022.  On March 24, 2021, the Company entered into an additional agreement which provided it the right, at its option, to further extend the maturity date of its Senior Secured Debt to November 25, 2022. The fee to acquire this second extension option was the adjustment of the exercise price of 362,500 warrants held by Apollo from $6.75 to $0.01 (“Warrant Modification”).

 

As a result of the Warrant Modification, the Company reclassified the carrying value of the warrant prior to the modification from a warrant liability in the amount of $1.3 million to additional paid-in capital. In addition, the Company recorded debt issuance costs in the amount of $1.9 million, which was the increase in fair value of the warrant at the time of the modification, with a corresponding adjustment to additional paid-in capital. Prior to the Warrant Modification, the fair value of the warrant was remeasured each reporting period using an option pricing model, and the change in fair value was recorded as an adjustment to the recorded warrant liability with the unrealized gains or losses reflected in interest expense. On May 10, 2021, Apollo exercised all of its 362,500 warrants, which allowed them to purchase 362,500 shares of common stock at $0.01 per share. For the six months ended June 30, 2021, the Company recognized a gain of $573 thousand related to the remeasurement of the warrant liability prior to the Warrant Modification.

 

On May 18, 2021, the Company exercised its first extension option to extend the maturity date to May 25, 2022 (“First Option Election Notice”). At the time of the First Option Election Notice, the Company was required to pay an extension option fee equal to 1% of the aggregate amount of the accreted loan value as of the date of such notice (“Extension Option Fee”). The Extension Option Fee was payable in cash or in shares of the Company’s common stock, at the option of the Company in its sole discretion. The Company opted to pay the Extension Option Fee in common stock, and as a result issued 64,356 shares of common stock to its lenders.

 

On June 28, 2021, an affiliate of BRS entered into an assignment and assumption agreement (“Assignment”) whereby it agreed to purchase all outstanding obligations under the Senior Secured Debt for $77.5 million. This Assignment closed on July 2, 2021. In conjunction with the closing of the Assignment, the Company issued 363,566 shares of the Company’s common stock to Apollo.

 

On July 2, 2021, the Company entered into the $50 million New Loan (see Note 10 – “Subsequent Events”). The proceeds from the New Loan, together with the proceeds from the Depositary Share Offering, were used to repay all of the Company's outstanding obligations under its existing Senior Secured Debt in the amount of approximately $77.5 million.