Quarterly report pursuant to Section 13 or 15(d)

Debt

v3.22.2
Debt
6 Months Ended
Jun. 30, 2022
Debt Disclosure [Abstract]  
Debt

Note 9. Debt

Credit Facilities

In December 2020, the Company entered into a Credit Agreement with Pacific Mercantile Bank (the "BoC Credit Agreement") for a $7.0 million line of credit (the "BoC Line of Credit"). Pacific Mercantile Bank was subsequently acquired by the Banc of California in October 2021. The BoC Line of Credit bears interest at a variable annual rate equal to 1.25% plus the Prime Rate (the Prime Rate was 4.75% as of June 30, 2022 and 3.25% as of December 31, 2021). In June 2022, the Company entered into an amendment to the BoC Credit Agreement, which among other things, extended the maturity date of the BoC Line of Credit to December 31, 2022 and provided for an incremental reduction of the Company's borrowing capacity under the BoC Line of Credit during the periods prior to the maturity date as presented below (in thousands), as follows:

For the Period Beginning:

 

Borrowing Capacity

 

July 1, 2022

 

$

6,500

 

August 1, 2022

 

 

5,500

 

September 1, 2022

 

 

4,500

 

October 1, 2022

 

 

3,500

 

November 1, 2022

 

 

2,500

 

December 30, 2022

 

 

 

The balance on the BoC Line of Credit as of June 30, 2022 and December 31, 2021 was $6.5 million and zero, respectively. The Company was in compliance with the credit agreement covenants as of June 30, 2022. The carrying value of the BoC Line of Credit approximates its fair value because the interest rates are based on established market rates. Since June 30, 2022, the Company has repaid $1.1 million of the outstanding borrowings under the BoC Line of Credit, resulting in an outstanding balance of $5.4 million as of the date of this Quarterly Report on Form 10-Q.

In December 2017, the Company entered into a Loan and Security Agreement with Multiplier Capital for a term loan of $5.0 million (the "Multiplier Term Loan"). While outstanding, the Multiplier Term Loan had a maturity date of June 29, 2022 and bore interest at a variable annual rate equal to 6.25% above the Prime Rate, with a minimum interest rate of 11.5% and a maximum interest rate of 14.0%. In November 2021, the Company extinguished the Multiplier Term Loan and repaid the remaining outstanding principal and interest of $2.5 million.

Interest expense on the BoC Line of Credit and Multiplier Term Loan was $0.1 million and $0.3 million for the three months ended June 30, 2022 and 2021, respectively, and $0.1 million and $0.4 million for the six months ended June 30, 2022 and 2021, respectively.

Paycheck Protection Program Loan

In April 2020, the Company received a Paycheck Protection Program loan administered by the Small Business Administration under the Coronavirus Aid, Relief, and Economic Security Act. The Company received a $1.4 million loan from Western Alliance Bank to help maintain payroll and operations through the period impacted by the COVID-19 pandemic. The Company applied for and was granted loan forgiveness for the full principal balance in March 2021 prior to making any interest or principal payments. Accordingly, the Company recognized $1.4 million upon forgiveness within the Gain on debt forgiveness from Paycheck Protection Program note payable caption on the unaudited condensed consolidated statement of operations during the six months ended June 30, 2021.