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Liquidity and Capital Resources Liquidity and Capital Resources
 6 Months Ended
Jun. 30, 2020
Liquidity and Capital Resources [Abstract]  
Liquidity and Capital Resources
Liquidity and Capital Resources
Working Capital
As of June 30, 2020, the Company had $48.2 million of cash and cash equivalents.  The Company reported total current assets of $107.6 million and current liabilities of $63.7 million as of June 30, 2020, yielding working capital of $43.9 million as of June 30, 2020.
Overall Liquidity and Capital Resources
The Company’s largest cash requirement for the six months ended June 30, 2020 was cash for general working capital needs. In addition, the Company’s other cash requirements included capital expenditures and investigation and restatement expenses. The Company funded its cash requirements through its existing cash reserves, and the BT Term Loan (as defined below) that closed in June 2019. The Company believes that its anticipated cash from operating and financing activities and existing cash and cash equivalents will enable the Company to meet its operational liquidity needs and fund its planned investing activities for the next 12 months from the date of the issuance of these condensed consolidated financial statements.

Issuance of $100 Million of Series B Convertible Preferred Stock

On July 2, 2020, the Company issued $100 million of the Company’s Series B Convertible Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”) to an affiliate of EW Healthcare Partners and to certain funds managed by Hayfin Capital Management LLP pursuant to a Securities Purchase Agreement with Falcon Fund 2 Holding Company, L.P., an affiliate of EW Healthcare Partners, and certain funds managed by Hayfin Capital Management LLP, dated as of June 30, 2020 (the “Securities Purchase Agreement”), for an aggregate purchase price of $100 million (the “Preferred Stock Transaction”).
The Series B Preferred Stock pays a 4.0% cumulative dividend per annum (the “Discounted Dividend Rate”) prior to the quarterly dividend payment ending on June 30, 2021, and a 6.0% cumulative dividend per annum (the “Perpetual Dividend Rate”) thereafter.
$75 million Loan Facility with Hayfin
On July 2, 2020, the Company executed a Loan Agreement with, among others, Hayfin Services LLP, an affiliate of Hayfin Capital Management LLP (the “Hayfin Loan Agreement”), which funded on July 2, 2020 (the “Hayfin Loan Transaction”) and provided the Company with a senior secured term loan in an aggregate amount of $50 million (the “Hayfin Term Loan”) and an additional $25 million delayed draw term loan (the “DD TL”) in the form of a committed but undrawn facility that is available for drawdown until June 30, 2021. The Hayfin Term Loan and the DD TL mature on July 2, 2025 (the “Maturity Date”). The Hayfin Term Loan and the DD TL have no fixed amortization (i.e., they are interest only through the Maturity Date).
Borrowings under the Hayfin Loan Agreement bear interest at a rate equal to LIBOR (subject to a floor of 1.5%) plus a margin of 6.75%. The margin will be eligible to step down to 6.5% or 6.0% based on future Total Net Leverage levels, as defined in the Hayfin Loan Agreement. The Company paid an upfront commitment fee of 2% of the aggregate of the Hayfin Term Loan and the DD TL. The DD TL is subject to an additional commitment fee of 1% of the amount undrawn.
The Hayfin Loan Agreement also contains certain affirmative covenants that impose certain reporting and/or performance obligations on the Company and its subsidiaries, including (i) Maximum Total Net Leverage of 5.0x through December 31, 2020, stepping down to 4.5x through June 30, 2021, and to 4.0x thereafter until the Maturity Date; (ii) Cap on Cash Netting for the purposes of calculating Total Net Leverage set at $10,000,000; (iii) a limit of 3.5x Total Net Leverage, tested prior to any draw downs under the DD TL; and (iv) Minimum Liquidity of $10,000,000, tested monthly (with each of Maximum Total Net Leverage, Cap on Cash Netting and Minimum Liquidity defined in the Hayfin Loan Agreement).
Repayment and Termination of BT Loan Agreement
On July 2, 2020, the Company repaid the remaining $72.0 million of principal and accrued interest and fees of $0.1 million under the loan agreement, dated as of June 10, 2019, by and among the Company, the subsidiaries of the Company as guarantors party thereto from time to time, the lenders party thereto from time to time, and Blue Torch Finance LLC (“Blue Torch”), as administrative agent and collateral agent, as amended by that certain First Amendment thereto, dated as of April 22, 2020 (the “BT Loan Agreement”), and terminated the BT Loan Agreement. As a result of the early termination of the BT Loan Agreement, the Company also incurred a prepayment premium of $1.4 million, which it paid with a portion of the proceeds from the Preferred Stock Transaction and the Hayfin Loan Transaction, as described above.
For more information regarding the Preferred Stock Transaction, the Hayfin Loan Transaction, and the repayment of the BT Term Loan refer to Item 9B of the 2019 Form 10-K.