XML 28 R18.htm IDEA: XBRL DOCUMENT v3.23.2
Note Payable
 6 Months Ended
Jun. 30, 2023
Debt Disclosure [Abstract]  
Note Payable
(12) Note Payable

On December 21, 2020, the Company entered into a $25.0
 
million
 
credit agreement with a financial institution which is subject to annual interest at a rate of 15% per annum (the “
n
ote”). In 2021, the
n
ote was amended to provide an additional $15.0
million
 
to fund the acquisition of BitAccess Inc. In March 2022, the
n
ote was amended to provide an additional term loan in an aggregate principal amount of $5.0
 
million
.
On May 2, 2023, the Company amended its note with its lender. Pursuant to the amendment, the accelerated repayment feature in the event of a business combination transaction or a change in control transaction was removed and the repayment date was extended to August 15, 2023 to allow for a negotiation of repayment schedule. In addition, the fixed interest rate in the note was modified to increase the rate from
15% per annum to 20% per annum effective February 15, 2023 through
August 15
, 2023, and a
catch-up
payment was made
for
the incremental interest from February 15, 2023 through March 31, 2023, of approximately $0.3 million.
On June 23, 2023, the Company amended and restated its credit agreement with its
existing 
lender. Under the
 
amended and restated credit agreement
,
the Company
refinanced
$20.8
million
 of the note
 
which is subject to
an 
annual interest at a rate of 17% per annum. The Company is required to make monthly interest payments and fixed principal payments every six months beginning on December 15, 2023 through June 15, 2026. The
note
 matures on June 23, 2026, at which time, any outstanding principal balance and any accrued interest become due.
 
Additionally, the Company is required to pay an exit fee of $1.8
million upon maturity or prepayment. The Company recorded a long-term liability which is included within note payable, non-current on the consolidated Balance Sheet. The note is collateralized by substantially all of the assets of the Company and is guaranteed by BT Assets, Inc., Mintz Assets, Inc., Express Vending, Inc., Intuitive Software, LLC, Digital Gold Ventures, Inc. and BitAccess Inc. The Company is subject to certain financial covenants contained in the note, which require the Company to maintain certain cash balances, a minimum consolidated cash interest coverage ratio, and a maximum consolidated total leverage ratio, in addition to customary administrative covenants.
The Company accounted for the amended and restated credit agreement as a debt modification in accordance with ASC 470,
Debt
.
In connection with the amended and restated credit agreement, the Company repaid approximately $
16.4
 
million of the outstanding principal balance, refinanced $20.8 million of the outstanding principal balance and paid an exit fee of $
2.3 
million.

 
The Company deferred approximately $
2.4
 
million
of costs paid to the lender associated with refinancing of the note, which was reflected as a reduction of the note proceeds.
 
The Company will recognize these deferred financing costs, along with the remaining unamortized deferred financing costs related to the original note, using the effective interest method over the term of the note.

Note payable consisted of the following as of June 30, 2023 and December 31, 2022 (in thousands):

 
   
June 30, 2023
 
  
December 31, 2022
 
Note payable
   
$
 20,750     
$
 39,419  
Plus: exit fee due upon payment of note
      1,764        —    
Less: unamortized deferred financing costs
      (4,502 )      (1,847 )
    
 
 
     
 
 
  
Total Note payable
      18,012        37,572  
Less: current portion of note payable
      (1,868 )      (8,050 ) 
    
 
 
     
 
 
  
Note payable, non-current
    $ (16,144 )    $ 29,522  
    
 
 
     
 
 
  
At June 30, 2023, aggregate future principal payments are
, excludes Exit Fee of $1.7 million due at any point the loan is prepaid or at maturity,
 
as follows (in thousands):
 
    
Amount
  
2023 (for the remainder of)
    $ 830  
2024
      2,282  
2025
      3,320  
2026
      14,318  
    
 
 
  
Total
    $ 20,750