Long-term Debt | 19. Long-term Debt Senior Secured Note Below is a summary of the various amended and restated note, as well as various amendments thereto, to the senior secured note with BRF Finance Co., LLC (“BRF Finance”), an affiliated entity of B. Riley, in its capacity as agent for the purchasers and as purchaser, that was originally issued on June 10, 2019, for gross proceeds of $ 20,000,000 . The transactions leading up to the second amended and restated note that is outstanding as of December 31, 2021 consisted of: ● Amended and restated note issued on June 14, 2019, where the Company received gross proceeds of $ 48,000,000 20,000,000 68,000,000 ● First amendment to the amended and restated note issued on August 27, 2019, where the Company received gross proceeds of $ 3,000,000 ● Second amendment to the amended and restated note issued on February 27, 2020, where the Company issued a $ 3,000,000 ● Second amended and restated note issued on March 24, 2020, where the Company was permitted to enter into a Delayed Draw Term Note (as described below), in the aggregate principal amount of $ 12,000,000 ; ● First amendment to second amended and restated note issued on March 24, 2020 was entered into on October 23, 2020 (“Amendment 1”), where the maturity date was changed to December 31, 2022, subject to certain acceleration conditions and interest payable on the note on September 30, 2020, December 31, 2020, March 31, 2021, June 30, 2021, September 30, 2021, and December 31, 2021 will be payable in-kind in arrears on the last day of such fiscal quarter. Alternatively, at the option of the holder, such interest amounts originally could have been paid in shares of Series K convertible preferred stock (the “Series K Preferred Stock”); however, after December 18, 2020, the date the Series K Preferred Stock converted into shares of the Company’s common stock, such interest amounts can be converted into shares of the Company’s common stock based upon the conversion rate specified in the Certificate of Designation for the Series K Preferred Stock, subject to certain adjustments (further details are described in Note 20); ● Second amendment to the second amended and restated note issued March 24, 2020 was entered into on May 19, 2021 (“Amendment 2”), pursuant to which: (i) the interest rate on the Senior Secured Note, as defined below, decreased from a rate of 12 % per annum to a rate of 10 % per annum; and (ii) the Company agreed that within one (1) business day after receipt of cash proceeds from any issuance of equity interests, it will prepay the certain obligations in an amount equal to such cash proceeds, net of underwriting discounts and commissions; provided, that, this mandatory prepayment obligation does not apply to any proceeds that the Company received from shares of the Company’s common stock issued pursuant to the securities purchase agreement (as further described below under the heading Common Stock Private Placement ● Third amendment to the second amended and restated note issued March 24, 2020 was entered into on December 6, 2021 (“Amendment 3”), where the Company was permitted to increase the FastPay line of credit in an aggregate principal amount not to exceed $ 25,000,000 Collectively, the amended and restated note and amendments thereto and the second amended and restated note and Amendment 1, Amendment 2 and Amendment 3 thereto are referred to as the “Senior Secured Note,” with all borrowings collateralized by substantially all assets of the Company. Further details as of the date these consolidated financial statements were issued are provided under the heading Long-term Debt Delayed Draw Term Note On March 24, 2020, the Company entered into a 15 12,000,000 On March 24, 2020, the Company drew down $ 6,913,865 793,109 6,000,000 8,000,000 ● Pursuant to the terms of Amendment 1, entered into on October 23, 2020, the maturity date of the Delayed Draw Term Note was changed from March 31, 2021 to March 31, 2022. Amendment 1 also provided that the holder, could originally elect, in lieu of receipt of cash for payment of all or any portion of the interest due or cash payments up to a certain conversion portion of the Delayed Draw Term Note, to receive shares of Series K Preferred Stock; however, after December 18, 2020, the date the Series K Preferred Stock converted into shares of the Company’s common stock, the holder may elect, in lieu of receipt of cash for such amounts, shares of the Company’s common stock at the price the Company last sold shares of the Company’s common stock; ● On October 23, 2020, $ 3,367,000 ● On May 19, 2021, pursuant to Amendment 2, the interest rate on the Delayed Draw Term Note decreased from a rate of 15 10 ● On December 28, 2021, the Company drew down $ 5,086,135 under the Delayed Draw Term Note, and after payment of commitment and funding fees paid of $ 508,614 , the Company received net proceeds of $ 4,577,522 . The net proceeds were used for working capital and general corporate purposes. Further details as of the date these consolidated financial statements were issued are provided under the heading Long-term Debt The following table represents the components of the Senior Secured Note and Delayed Draw Term Note: Schedule of Senior Secured Notes and Delayed Draw Term Note As of and for the Years Ended December 31, 2021 2020 Senior Secured Note Components Delayed Draw Term Note Components Total Senior Secured Note Components Delayed Draw Term Note Components Total Principal amount of debt: Principal amount of debt received on June 10, 2019 $ 20,000,000 $ - $ 20,000,000 $ 20,000,000 $ - $ 20,000,000 Principal amount of debt received on June 14, 2019 48,000,000 - 48,000,000 48,000,000 - 48,000,000 Principal amount of debt received on August 27, 2019 3,000,000 - 3,000,000 3,000,000 - 3,000,000 Principal amount of debt received on March 26, 2020 - 6,913,865 6,913,865 - 6,913,865 6,913,865 Principal amount of debt received on December 28, 2021 - 5,086,135 5,086,135 - - - Subtotal principal amount of debt 71,000,000 12,000,000 83,000,000 71,000,000 6,913,865 77,913,865 Add accrued interest 13,852,050 1,223,506 15,075,556 7,457,388 675,958 8,133,346 Less principal payment paid in Series J Preferred Stock (net of interest of $ 146,067 (4,853,933 ) - (4,853,933 ) (4,853,933 ) - (4,853,933 ) Less principal payment paid in Series K Preferred Stock (net of interest of $ 71,495 - (3,295,505 ) (3,295,505 ) - (3,295,505 ) (3,295,505 ) Less principal payments paid in cash (17,307,364 ) - (17,307,364 ) (17,307,364 ) - (17,307,364 ) Principal amount of debt outstanding including accrued interest 62,690,753 9,928,001 72,618,754 56,296,091 4,294,318 60,590,409 Debt discount: Placement fee to B. Riley FBR (3,550,000 ) (691,387 ) (4,241,387 ) (3,550,000 ) (691,387 ) (4,241,387 ) Commitment fee ( 2 - (101,723 ) (101,723 ) - (101,723 ) (101,723 ) Success based fee to B. Riley FBR (3,400,000 ) - (3,400,000 ) (3,400,000 ) - (3,400,000 ) Legal and other costs (202,382 ) (120,755 ) (323,137 ) (202,382 ) (120,755 ) (323,137 ) Commitment fee due December 28, 2021 - (508,614 ) (508,614 ) - - - Subtotal debt discount (7,152,382 ) (1,422,479 ) (8,574,861 ) (7,152,382 ) (913,865 ) (8,066,247 ) Less amortization of debt discount 5,217,914 855,007 6,072,921 3,412,692 554,693 3,967,385 Unamortized debt discount (1,934,468 ) (567,472 ) (2,501,940 ) (3,739,690 ) (359,172 ) (4,098,862 ) Carrying value at year-end $ 60,756,285 $ 9,360,529 $ 70,116,814 $ 52,556,401 $ 3,935,146 $ 56,491,547 Paycheck Protection Program Loan On April 6, 2020, the Company entered into a note agreement with JPMorgan Chase Bank, N.A. (“JPMorgan Chase”) under the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the U.S. Small Business Administration (“SBA”) (the “Paycheck Protection Program Loan”). The Company received total proceeds of $ 5,702,725 April 6, 2022 0.98 On June 22, 2021, the SBA authorized full forgiveness of $ 5,702,725 5,716,697 The following table summarizes long-term debt: Schedule of Long Term Debt As of December 31, 2021 2020 Principal Balance (including accrued interest) Unamortized Discount and Debt Issuance Costs Carrying Value Principal Balance (including accrued interest) Unamortized Discount and Debt Issuance Costs Carrying Value Senior Secured Note, as amended, matures December 31, 2023 $ 62,690,753 $ (1,934,468 ) $ 60,756,285 $ 56,296,091 $ (3,739,690 ) $ 52,556,401 Delayed Draw Term Note, as amended, matures December 31, 2023 9,928,001 (567,472 ) 9,360,529 4,294,318 (359,172 ) 3,935,146 Paycheck Protection Program Loan, scheduled to mature April 6, 2022, fully forgiven June 22, 2021 - - - 5,702,725 - 5,702,725 Total $ 72,618,754 $ (2,501,940 ) 70,116,814 $ 66,293,134 $ (4,098,862 ) 62,194,272 Less current portion (5,744,303 ) - Long-term portion $ 64,372,511 $ 62,194,272 As of December 31, 2021, the Company’s Delayed Draw Term Note, as amended, carrying value of $ 9,360,529 5,744,303 180,365 3,616,226 387,107 The following table summarizes principal maturities of long-term debt: Schedule of Principal Maturities of Long-term Debt Years Ending December 31, 2022 $ 5,924,668 2023 66,694,086 Total $ 72,618,754 Information for the years ended December 31, 2021 and 2020 with respect to interest expense related to long-term debt is provided below under the heading Interest Expense Interest Expense The following table represents interest expense: Summary of Interest Expense Years Ended December 31, 2021 2020 Amortization of debt discounts: 12% Convertible Debentures $ - $ 3,880,609 Senior Secured Note 1,805,222 2,171,910 Delayed Draw Term Note 300,314 554,693 Total amortization of debt discount 2,105,536 6,607,212 Accrued and noncash converted interest: 12% Convertible Debentures - 2,116,281 Senior Secured Note 6,394,662 6,374,746 Delayed Draw Term Note 547,548 747,453 Payroll Protection Program Loan 13,972 - Promissory Note - 5,844 Total accrued and noncash converted interest 6,956,182 9,244,324 Cash paid interest: Other 1,392,900 645,681 Total interest expense $ 10,454,618 $ 16,497,217 |