Subsequent Events

3 Months Ended

Mar. 31, 2020

(10)	Subsequent Events

On June

, 2020, the Company entered into the Amendment to the credit agreement with certain of its lenders and now projects that it will be in compliance with all applicable financial covenants, as amended, through June 30, 2021. Specifically, the Amendment amended and modified the credit agreement to, among other things, (i) increase the interest rate applicable to the term loans and revolving credit facility by 25 basis points per annum, (ii) add fees of 300 bps payable on December 31, 2021 and 150 bps payable on December 31, 2022, if the credit agreement is not refinanced prior to such time, (iii) impose additional reporting requirements, (iv) revise the Excess Cash Flow prepayment requirement such that when the Total Leverage Ratio is greater than 4.5x, 75% of Excess Cash Flow must be prepaid, with such prepayment amounts stepping down to 50%, 25% and 0% upon achievement of certain Total Leverage Ratio milestones, and (v) reduce the flexibility to incur certain additional indebtedness, liens and investments and make certain restricted payments, subject to the achievement of certain leverage based milestones.

Additionally, the Amendment modified the financial covenant to remove the maximum First Lien Leverage Ratio previously tested quarterly through the fiscal quarter ended March 31, 2020. In its place, the Amendment added (i) a minimum liquidity covenant of $8.5 million

(the “Minimum Liquidity Amount”),

which will be tested every other week until the Total Leverage Ratio is less than 5.0x, (ii) a minimum Consolidated EBITDA (as defined in the credit agreement, as amended by the Amendment) covenant, which will be tested monthly through June 30, 2021 and (iii) a maximum First Lien Leverage Ratio covenant, which will be tested quarterly beginning with the fiscal quarter ending September 30, 2021. The Amendment also modifies the definition of Consolidated EBITDA to remove certain

add-backs

with respect to the calculation of Consolidated EBITDA for financial covenants and other similar calculations and reduces the amount of cash that can be netted for the calculation of the First Lien Leverage Ratio for purposes of testing the First Lien Leverage Ratio financial covenant, when applicable.

Also, as a condition to entering into the Amendment, George Beasley, the Company’s Chairman, will provide a $5 million loan to the Company that will accrue

payment-in-kind

interest at 6% per annum with no cash payments due until the loan’s maturity in December 2023.

Mr. Beasley and GGB Family Limited Partnership will also each enter into standby letters of credit in combined aggregate face amount of $5,000,000 in favor of U.S. Bank, National Association for the benefit of the Company as a source of backup liquidity that may be drawn by U.S. Bank, National Association in the event that the Company fails to maintain the Minimum Liquidity Amount.

Also, on June

, 2020, the Company entered into the Amended Promissory Note. The Amended Promissory Note has a balance of $10.5 million and bears cash-pay interest at 5% per annum payable quarterly in arrears and additional payment-in-kind interest at 10% per annum. The Amended Promissory Note provides for cash principal payments of $500,000 on June 30, 2020 and $2,250,000 on December 31, 2020.

Pursuant to the Amended Promissory Note

, the Company

will

issue an initial stock payment of 1,276,596 shares of Class A common stock at a fixed price of $2.35 per share which will reduce the principal by $2,250,000. For subsequent stock issuances, which begin on June 30, 2021, the principal reduction amount will be the lesser of (i) the value of the stock issued based on 20-day moving average on the day prior to issuance or (ii) the “principal reduction amount,” which is 50% of the value of the stock based on a fixed price of $2.35 per share. The number of shares to be issued was fixed at the time of the signing of the note and will not exceed 3,191,489 in the aggregate (including the June 2020 issuance). All accrued but unpaid interest and the then outstanding principal amount of the Amended Promissory Note will be paid in full in cash on December 31, 2023. The Amended Promissory Note will mature on December 31, 2023 and may be prepaid at any time at the option of the Company. The Company will evaluate the impact of the stock payments in the second quarter of 2020.

On May 5, 2020, the Company entered into an agreement to sell certain land in Charlotte, NC to a third party for $4.7 million. The Company expects to close on the sale and record a gain during the fourth quarter of 2020.