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Note 5 - Long-term Debt, Net
 9 Months Ended
Sep. 30, 2021
Notes to Financial Statements  
Debt Disclosure [Text Block]

5. Long-term debt, net

 

Long-term debt, net, related to the Refinanced Term Loan, the New Credit Facility Term Loan, and Note Payable (each as defined below) consisted of the following:

 

  

September 30, 2021

  

December 31, 2020

 

Refinanced Term Loan due 2023 (less unamortized discount and financing costs of $0 and $2,386, respectively)

 $—  $39,350 

New Credit Facility Term Loan due 2026 (less unamortized discount and financing costs of $993 and $0, respectively)

  46,507   — 

Note Payable due 2021 (less unamortized discount of $0 and $24, respectively)

  —   1,226 

Long-term debt, net

  46,507   40,576 

Less: Current portion of long-term debt

  (5,000)  (7,293)

Long-term debt, net (non-current)

 $41,507  $33,283 

 

 

Refinanced Term Loan

 

On March 31, 2021, Fluent, LLC redeemed in full $38,318 aggregate principal amount of its prior term loan entered into on December 8, 2015 and due March 26, 2023 (the "Refinanced Term Loan"), prior to maturity, resulting in a loss of $2,964 as a cost of early extinguishment of debt.

 

New Credit Facility

 

On March 31, 2021, Fluent, LLC entered into a credit agreement (the “Credit Agreement”) by and among, Fluent, LLC, certain subsidiaries of Fluent, LLC as guarantors, Citizens Bank, N.A. as administrative agent, lead arranger and bookrunner, BankUnited, N.A. and Silicon Valley Bank. The Credit Agreement provides for a term loan in the aggregate principal amount of $50.0 million funded on the closing date (the “Term Loan”), along with an undrawn revolving credit facility of up to $15.0 million (the "Revolving Loans," and together with the Term Loan, the "New Credit Facility").

 

The proceeds of the Term Loan were used to repay all outstanding amounts under the Refinanced Term Loan, including transaction fees and expenses, and for working capital and other general corporate purposes.

 

Borrowings under the Credit Agreement bear interest at a rate per annum equal to an applicable margin, plus, at the Company's option, either a base rate or a LIBOR rate (subject to a floor of 0.25%). The applicable margin is between 0.75% and 1.75% for base rate borrowings and 1.75% and 2.75% for LIBOR rate borrowings, depending upon the Company's consolidated leverage ratio. The opening interest rate of the New Credit Facility is 2.50% (LIBOR + 2.25%). 

 

Borrowings under the Credit Agreement are secured by substantially all of the assets of Fluent, LLC and, subject to certain exclusions, each of its existing and future U.S. subsidiaries. Such assets include, subject to certain limitations, the equity interests of each of the existing and future direct and indirect U.S. subsidiaries of Fluent, LLC.

 

The Credit Agreement contains negative covenants that, among other things, limit Fluent, LLC's ability to: incur indebtedness; grant liens on its assets; enter into certain investments; consummate fundamental change transactions; engage in mergers or acquisitions or dispose of assets; enter into certain transactions with affiliates; make changes to its fiscal year; enter into certain restrictive agreements; and make certain restricted payments (including for dividends and stock repurchases, which are generally prohibited except in a few circumstances and/or up to specified amounts). Each of these limitations are subject to various conditions.

 

The Credit Agreement matures on March 31, 2026 and interest is payable monthly. Scheduled principal amortization of the Term Loan is $1,250 per quarter, which commenced with the fiscal quarter ended June 30, 2021. At September 30, 2021, the Company was in compliance with all of the financial and other covenants under the Credit Agreement.

 

Note Payable

 

On July 1, 2019, in connection with the AdParlor Acquisition, the Company issued a promissory note (the "Note Payable") in the principal amount of $2,350, net of discount of $150 from imputing interest on the non-interest-bearing note using a 4.28% rate. The promissory note was guaranteed by the Company's subsidiary, Fluent, LLC, did not accrue interest except in the case of default, was payable in two equal installments on the first and second anniversaries of the date of closing of the acquisition and was subject to setoff in respect of certain indemnity and other matters. The first installment payment of $1,250 was made on July 1, 2020, and the second installment payment of $1,250 was made on July 1, 2021, in each case using cash on hand.

 

Maturities

 

As of September 30, 2021, scheduled future maturities of the Credit Agreement and Note Payable are as follows:

 

Year

  September 30, 2021 

Remainder of 2021

 $1,250 

2022

  5,000 

2023

  5,000 

2024

  5,000 

2025

  5,000 

2026

  26,250 

Total maturities

 $47,500 

 

Fair value

 

As of September 30, 2021, the fair value of long-term debt is considered to approximate its carrying value. The fair value assessment represents a Level 2 measurement.