Quarterly report pursuant to Section 13 or 15(d)

DEBT

v3.24.2
DEBT
 3 Months Ended
Mar. 31, 2024
Debt Disclosure [Abstract]  
DEBT

NOTE 6. DEBT

 

Our debt balance, excluding operating lease liabilities and finance lease liabilities, consisted of the following amounts at the dates indicated:

 

   

(in thousands)   2023     2022  
    As of  
(in thousands)  

March 31,

2024

    

December 31,

2023		  
Future Receivables Financing   $ 2,093     $ 2,174  
Secured Bridge Loan     5,109       5,109  
  Total long term debt     7,202       7,283  
Less unamortized debt issuance costs     —       —
Less current portion of debt     (7,202 )     (7,283 )
Debt, net, excluding operating and finance leases and liabilities   $ —     $ —  

 

Future Receivables Financings

 

On July 31, 2023 and August 3, 2023, the Company received an aggregate of approximately $3.0 million in cash pursuant to the terms of future receivables financings (collectively, the “Future Receivables Financings”) entered into with two private lenders. The Company will make weekly payments under the Future Receivables Financings and is scheduled to repay the amounts due under the Future Receivables Financings in full in approximately six to eight months. The total amount to be repaid under the initial Future Receivables Financings was approximately $4.5 million. In connection with the Future Receivables Financings, the Company granted the lenders security interests in Company’s accounts receivable equal to the amounts due thereunder, and in connection with any event of default, the lenders may file financing statements evidencing the security interests.

 

Secured Bridge Loan

 

On September 22, 2023, the Company entered into a secured loan pursuant to a Loan and Security Agreement (the “September 2023 Loan Agreement”), dated as of September 22, 2023 with Synergy Imports, LLC (the “Secured Bridge Loan Lender”).

 

Pursuant to the September 2023 Loan Agreement, the Secured Bridge Loan Lender agreed to make available to the Company a six-month bridge loan of $2.2 million in new funds. Additionally, the Secured Bridge Loan Lender agreed to defer payments totaling $2,028,604 already owed by the Company under existing payment obligations and potentially defer up to an additional $2,655,778 which may become due pursuant to existing agreements during the term of the September 2023 Loan Agreement.

 

Subject to certain exceptions, the Company agreed to pledge all of its assets, with the exception of deposit accounts and accounts receivable, as collateral. Additionally, the Company agreed to transfer one US patent and two related foreign patents and a related trademark in exchange for an exclusive license back of such assets in the area of smoking products and accessories in connection with the September 2023 Loan Agreement.

 

Future Minimum Principal Payments

 

The following table summarizes future scheduled minimum principal payments of debt at March 31, 2024. Future debt principal payments are presented based upon the stated maturity dates in the respective debt agreement.

 

 

(in thousands)   Remainder 2024     2025     2026     2027     2028     Total  
    Year Ending December 31,  
(in thousands)   Remainder 2024     2025     2026     2027     2028     Total  
Future Receivables Financing   $ 2,093     $ —     $ —     $ —     $ —     $ 2,093  
Secured Bridge Loan     5,109       —       —       —       —       5,109  
Total   $ 7,202     $ —     $ —     $ —     $ —     $ 7,202