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NOTES PAYABLE | 9 Months Ended
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Sep. 30, 2023
Debt Disclosure [Abstract] |
NOTES PAYABLE | NOTES PAYABLE The following table summarizes our outstanding debt as of the dates indicated (in thousands):
| Maturity |  | Cash Interest Rate |  | September 30, 2023 |  | December 31, 2022
Subordinated Notes Payable – Acquisitions(1) | 12/31/2022 – 9/30/2026 |  | 2.00% - 3.00% |  | $ | 4,200 |  |  | $ | 6,947 |
Senior Credit Facility | 10/1/2025 |  | 14.25% |  | — |  |  | 30,607 |
Gross Notes Payable |  |  |  |  | $ | 4,200 |  |  | $ | 37,554 |
(1)See Note 3 — Business Combinations and Asset Acquisitions and Subordinated Notes Payable - Acquisitions section below for further discussion regarding the notes payable related to acquisitions. The following table summarizes the debt issuance costs as of the dates indicated (in thousands):
| Gross Notes Payable |  | Debt Issuance Costs and Debt Discount |  | Net Notes Payable
September 30, 2023 |  |  |  |  |
Current portion of notes payable | $ | 420 |  |  | $ | (225) |  |  | $ | 195 |
Notes payable, net of current portion | 3,780 |  |  | (1,147) |  |  | 2,633 |
Total | $ | 4,200 |  |  | $ | (1,372) |  |  | $ | 2,828 |
December 31, 2022 |  |  |  |  |
Current portion of notes payable | $ | 4,774 |  |  | $ | (668) |  |  | $ | 4,106 |
Notes payable, net of current portion | 32,780 |  |  | (1,985) |  |  | 30,795 |
Total | $ | 37,554 |  |  | $ | (2,653) |  |  | $ | 34,901 |
The following table summarizes the future principal payments related to our outstanding debt as of September 30, 2023 (in thousands):
2023 | $ | — |
2024 | 420 |
2025 | 378 |
2026 | 3,402 |
Total | $ | 4,200 |
Subordinated Notes Payable - Acquisitions In January 2023, the Company resolved the outstanding claims for indemnification for which it was withholding payment of the subordinated note payable as security for such claim. As a result of the resolution of those claims, the remaining balance of $232 has been paid to the Seller ($182) and to the claimant ($50) in satisfaction of its claim. As of September 30, 2023, there are no further amounts due or owing under this subordinated promissory note. In April 2023, the Company calculated the final contingent consideration due in connection with the acquisition of a payroll business in September 2021. As a result, the fair value of the contingent consideration of $587 was added as an increase to the principal balance due on the promissory note. As of September 30, 2023, the promissory note had an outstanding balance of $4,200. In May 2023, the Company paid the outstanding balance of a subordinated note payable in connection with the acquisition of customer relationships of a payroll business that took place in 2022. As a result, the Company paid the remaining balance of $422 on the promissory note consisting of $411 in principal and $11 in accrued interest. As of September 30, 2023, there are no further amounts due or owing under the subordinated note payable. In September 2023, the Company paid the outstanding balance of a subordinated note payable in connection with the acquisition of certain assets of a payroll business that took place in 2021. As a result, the Company paid the remaining balance of $2,312 on the promissory note consisting of $2,223 in principal and $89 in accrued interest. As of September 30, 2023, there are no further amounts due or owing under the subordinated note payable. Senior Credit Facility with Structural Capital Investments III, LP On September 10, 2021, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Structural Capital Investments III, LP (“Structural” and together with the other lenders that are or become parties thereto, the “Lenders”), and Ocean II PLO LLC, as administrative and collateral agent for the Lender (“Agent”), under the terms of which the Lenders committed to lend us up to $50,000 in term loan financing to support our growth needs (the “Facility”). Of the amount committed by the Lenders, the Company drew $30,000 in September 2021. The Company also entered into a secured promissory note with the Agent evidencing our obligations under the Facility. On August 7, 2023, the Company entered into an amendment to the Facility, whereby the Final Payment Fee (as defined in the Loan Agreement) was settled for $1,677 (the “Settled Amount”), which was paid on August 7, 2023. The Final Payment Fee was originally equal to 1.0% of the increase in our market capitalization since September 10, 2021, and was due upon payment in full of the obligations under the Senior Credit Facility. The Company also paid the Lenders a fee equal to $250 to be credited against any reimbursable expenses owed to the Lenders in a future refinancing of the Facility if it occurs prior to December 31, 2024. On September 12, 2023, the Company opted to terminate the Loan Agreement and repay the outstanding balance on the secured promissory note (the “Note”). In connection with the termination, the Company paid the Agent for the benefit of the Lenders an aggregate amount of $30,927 (the “Payoff Amount”) in full payment of our outstanding obligations under the Loan Agreement. The Payoff Amount represented $30,617 of outstanding principal and interest on the unpaid principal balance, a 1.0% prepayment fee in the amount of $306 and $5 for the accrued non-utilization fee and lender expenses associated with the extinguishment. As of September 30, 2023, there are no further amounts due or owing under the Facility.

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