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Note 7 - Debt
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Debt Disclosure [Text Block]

 

NOTE 7: DEBT

 

Debt for the Company consists of the following:

 

           

June 30,

    

December 31,

                  

Debt Instrument

  

Issuance Date

  

Maturity Date

  

2024

    

2023

    

Warrants

    

Interest Rate Information

  

Revolving credit facility

  

5/23/2024

  

5/23/2027

   $ 13,819     $ -    

None

    

See below

  

Acquisition Term Loan

  

2/17/2022

  

2/15/2025

     -       10,000       833,334       8 %

Consolidation Term Loan

  

2/17/2022

  

2/15/2025

     -       5,147       898,165       10 %
                                         

Total debt, gross

       13,819       15,147                  

Less: Deferred financing costs

     269       1,628                  

Total debt, net

     13,550       13,519                  

Less: Current portion

     -       3,690                  

Total long-term debt, net

   $ 13,550     $ 9,829                  

 

 

On May 23, 2024, the Company entered into a Credit Agreement (the "Credit Agreement") with First Merchants Bank (the "Bank"). The Credit Agreement provides the Company with a $22,100 secured revolving credit facility, with an uncommitted accordion feature that provides for additional borrowing capacity of up to $5,000, subject to the Bank's approval and other customary terms and conditions set forth in the Credit Agreement. The revolving credit facility matures on May 23, 2027, subject to any earlier default under the Credit Agreement. The Credit Agreement requires the Company to pay the entire unpaid principal balance of the revolving credit facility on the maturity date, May 23, 2027, subject to any earlier default under the Credit Agreement. The Credit Agreement includes, among other things, the occurrence of any event which could reasonably be anticipated to cause or result in a “Material Adverse Effect” (as defined in the Credit Agreement) as an event of default under which the outstanding balance could become due and payable to the Bank. The Company has determined that the risk of such event is not probable and therefore has classified the outstanding balance in long-term liabilities in the Condensed Consolidated Balance Sheets based on the maturity date.

 

On May 23, 2024, the Company borrowed $13,667 under the revolving credit facility to repay all obligations owing to its prior lender, Slipstream Communications, LLC, including the outstanding principal balance of $10,000 on the Acquisition Term Loan, the outstanding principal balance of $3,593 on the Consolidation Term Loan and accrued interest expense incurred through the payoff date of $74. The Company recognized a $1,059 loss on extinguishment of debt equal to the unamortized portion of debt discount at May 23, 2024 associated with the Acquisition Term Loan and Consolidation Term Loan.

 

The revolving credit facility accrues interest at a floating rate equal to the 1-month SOFR, plus 0.11%, plus a floating margin ranging from 2.00% to 3.50% that adjusts quarterly, depending upon the Company's Senior Funded Debt to EBITDA Ratio. The floating margin is determined as follows:

 

Senior Funded Debt to EBITDA Ratio

  

Floating Margin

  

< 1.00 to 1

     2.00 %

≥ 1.00 to 1.00 but < 2.00 to 1.00

     2.50 %

≥ 2.00 to 1.00 but < 3.00 to 1.00

     3.00 %

≥ 3.00 to 1.00

     3.50 %

 

 The effective interest rate at June 30, 2024 was 8.93%. The Company shall pay accrued interest monthly on the first day of each successive calendar month, beginning July 1, 2024, and continuing thereafter.

 

The Company incurred $281 of deferred financing costs that were capitalized during the three months ended June 30, 2024 and recorded as other non-current assets within the Condensed Consolidated Balance Sheets.  Deferred financing costs will be amortized as interest expense over the respective debt instrument period, 36 months. 

 

The Company had $13,819 in outstanding borrowings under the revolving credit facility as of June 30, 2024. Total availability under the revolving facility was $4,281, after accounting for $4,000 reserved under the Credit Agreement until resolution of the Contingent Consideration.

 

As of June 30, 2024, the Company was in compliance with all applicable debt covenants.