Note Payable

9 Months Ended

Aug. 31, 2019

Note 6 – Notes Payable

On May 20, 2016, the Company entered into a Credit Agreement (“Agreement”) with Texas Capital Bank, National Association (“TCB”) for a term loan of $8.0 million in senior credit facilities. The proceeds of the term loan were used by the Company to fund repurchases of the Company’s common stock.

Subject to the terms of the Agreement, on May 20, 2016, TCB advanced the Company $100.00. On July 1, 2016, TCB advanced the remaining principal amount of $7,999,900 per a promissory note dated May 20, 2016 between the Company and TCB, at a rate of

3.75% per annum plus LIBOR

, payable

monthly

with a maturity date of July 2021.

On August 26, 2016, the Company entered into a First Amendment to Credit Agreement with TCB. Pursuant to terms of the First Amendment to Credit Agreement, on August 26, 2016, TCB made an additional advance to the Company in principal amount of $2,133,433 per an Amended and Restated Promissory Note dated August 26, 2016 between the Company and TCB. The additional proceeds of the term loan were used by the Company to fund the extinguishment of revenue sharing agreements. On June 11, 2018, the Company entered into a Second Amendment to Credit Agreement with TCB. Pursuant to the terms of the Second Amendment to Credit Agreement, TCB increased the current outstanding principal amount of the loan from TCB by $9,000,000 to finance a portion of the purchase price of the Cord:Use Purchase. In connection therewith, Cryo-Cell executed and delivered to TCB a Second Amended and Restated Promissory Note, in the principal amount of $15,500,000. As of the three and nine months ended August 31, 2019, the Company paid interest of $162,134 and $523,818, respectively, which is reflected in interest expense on the accompanying consolidated statements of comprehensive income

(loss)

. As of the three month and nine months ended August 31, 2018, the Company paid interest of $204,609 and $393,254, respectively, which is reflected in interest expense on the accompanying consolidated statements of comprehensive income (loss).

Collateral of the term and subordinated loans includes all money, securities and property of the Company.

The Company incurred debt issuance costs related to the term loan in the amount of $548,085 which is recorded as a direct reduction of the carrying amount of the note payable and amortized over the life of the loan. As of the three and nine months ended August 31, 2019, $28,014 and $86,014, respectively, of the debt issuance costs were amortized and are reflected in interest expense on the accompanying consolidated statements of comprehensive income

(loss)

. As of the three and nine months ended August 31, 2018, $28,337 and $79,876, respectively, of the debt issuance costs were amortized and are reflected in interest expense on the accompanying consolidated statements of comprehensive income.

As of August 31, 2019 and November 30, 2018, the note payable obligation was as follows:


	August 31, 2019			November 30, 2018
Note payable	$	9,883,433		$	13,208,433
Unamortized debt issuance costs		(178,906	)		(264,923	)

Net note payable	$	9,704,527		$	12,943,510

Current portion of note payable	$	3,100,000		$	3,100,000
Long-term note payable, net of debt issuance costs		6,604,527			9,843,510

Total	$	9,704,527		$	12,943,510

Interest expense on the note payable for the three and nine months ended August 31, 2019 and August 31, 2018 was as follows:


	For the three months ended August 31, 2019		For the nine months ended August 31, 2019
Interest expense on notes payable	$	162,134	$	523,818
Debt issuance costs		28,014		86,014

Total interest expense	$	190,148	$	609,832


	For the three months ended August 31, 2018		For the nine months ended August 31, 2018
Interest expense on notes payable	$	204,609	$	393,254
Debt issuance costs		28,337		79,876

Total interest expense	$	232,946	$	473,130