Debt and Finance Lease Liabilities

6 Months Ended

Jul. 31, 2020

As of July 31, 2020 and January 31, 2020, the Company had the following outstanding debt and finance lease liabilities:


	July 31, 2020		January 31, 2020
Revolving credit facility	$	20,663	$	—
Term loan	—		20,000
Finance leases	5,969		3,612
Other debt	2,797		808
Accrued interest and payments	34		381
Total debt and finance lease liabilities, before original issue discount	29,463		24,801
Less deferred financing costs and original issue discount	(1,393)		(937)
Debt and finance lease liabilities	28,070		23,864
Less - current maturities of debt and finance lease liabilities	(4,939)		(2,324)
Long term debt and finance lease liabilities	$	23,131	$	21,540

Second Amended and Restated Loan and Security Agreement

On May 5, 2020 (the "Second SVB Effective Date"), the Company entered into a Second Amended and Restated Loan and Security Agreement (“the Second SVB Facility”) with Silicon Valley Bank. The Second SVB Facility modified the First Amended and Restated Loan and Security Agreement, dated February 28, 2019 (the "First SVB Facility"). The Second SVB Facility provides for a revolving credit facility with an initial borrowing capacity of $50,000. The borrowing capacity may be increased to $65,000 at the sole discretion of Silicon Valley Bank. Upon entering into the Second SVB Facility, the Company borrowed $20,663 against the revolving credit facility. The Company used the proceeds from its initial revolving credit borrowing to repay all amounts due under the First SVB Facility term loan, including the $20,000 outstanding principal amount plus a prepayment fee of $300 and an accrued final payment fee of $363.

Borrowings under the revolving credit facility are payable five years from the Effective Date, which is May 5, 2025 (the "Maturity Date"). Borrowings under the revolving credit facility bear interest, which is payable monthly, at a floating rate equal to the greater of the Wall Street Journal Prime Rate or 4.5%, until such time that adjusted EBITDA as defined in the Second SVB Facility (SVB Facility Adjusted EBITDA) reaches a defined level, after which time the interest rate is reduced to the greater of prime less 0.5%, or 4.0%. For the three months ended July 31, 2020, the interest rate on the Second SVB Facility was 4.5%. In addition to principal and interest due under the revolving credit facility, the Company is required to pay an annual commitment fee of $125 per year. The first facility fee payment of $125 was paid during the three months ended July 31, 2020. The Company has $29,337 of availability as of July 31, 2020

In the event that the Company terminates the Second SVB Facility prior to the Maturity Date, the Company will be required to pay a termination fee equal to (i) $187, reduced by $6 for each calendar month that has elapsed after April 30, 2020, plus (ii) a percent of the total borrowing capacity equal to 1.5% if terminated before the second anniversary of the Second SVB Effective Date, 0.75% if terminated on or after the second and before the third anniversary of the Second SVB Effective Date funding, or 0.5% if terminated on or after the third and before the fourth anniversary of the 2020 Effective Date. The Company will not be required to pay a termination fee if terminated after the fourth anniversary of the 2020 Effective Date.

The Company’s obligations under the Second SVB Facility are secured by a first priority security interest in substantially all of its assets, other than intellectual property. The Second SVB Facility includes a financial covenant that requires the Company to achieve specified levels of SVB Facility Adjusted EBITDA. The financial covenant will not be effective if the Company maintains certain levels of liquidity as defined. The Company was in compliance with all covenants related to the Second SVB Facility as of July 31, 2020.

The Second SVB Facility contains events of default, including, without limitation, events of default upon: (i) failure to make payment pursuant to the terms of the agreement; (ii) violation of covenants; (iii) material adverse changes to the Company’s business; (iv) attachment or levy on the Company’s assets or judicial restraint on its business; (v) insolvency; (vi) significant judgments, orders or decrees for payments by the Company not covered by insurance; (vii) incorrectness of representations and warranties; (viii) incurrence of subordinated debt; (ix) revocation of governmental approvals necessary for the Company to conduct its business; and (x) failure by the Company to maintain a valid and perfected lien on the collateral securing the borrowing.

During the three months ended July 31, 2020, the Company accounted for the settlement of the First SVB Facility term loan and the borrowings under the Second SVB Facility as a modification of the First SVB Facility term loan, because the cash flows under the Second SVB Facility were not substantially different than the cash flows under the First SVB Facility term loan. The Company incurred $531 of fees in connection with the Second SVB Facility, including $406 of fees to terminate the First SVB Facility and $125 of fees to enter into the Second SVB Facility. As the Second SVB Facility was accounted for as a modification, the Company recorded these fees as an additional discount on debt. The Company recorded third party costs as additional discount on debt because the unused borrowing capacity on the revolving credit facility contained in the Second SVB Facility was greater than the borrowing capacity on the revolving credit facility in the Second SVB Facility. The Company is continuing to amortize the existing and newly recorded discount on debt using the effective interest method.

First Amended and Restated Loan and Security Agreement

On February 28, 2019 (the Effective Date), the Company entered into a First Amended and Restated Loan and Security Agreement (the "First SVB Facility") that provided for a $20,000 term loan (the "2019 Term Loan") and a revolving credit facility with up to $25,000 of availability. Interest on the term loans was payable monthly, at a floating rate equal to the bank’s prime rate plus 1.50% until such time that EBITDA reached a defined level, after which time the interest rate would be reduced to the prime plus 0.75%. Principal payments due under the term loans were due in 36 equal monthly installments beginning in March 2021. In addition to principal and interest payments due under the term loans, the Company was required to make a final payment to the lenders due upon the earlier of prepayment or maturity of the term loan, which was equal to 2.75% of the original principal amount. The Company was accruing the estimated final payment fee using the effective interest method resulting in a charge to interest expense of $257 for the three months ended July 31, 2020. In connection with the First SVB Facility, the Company issued warrants to the lenders to purchase an aggregate of 150,274 shares of common stock at an exercise price of $8.02 per share. The 75,137 common stock warrants that remain outstanding as of July 31, 2020 expire in February 2029. . Borrowings under the prior term loan and loans payable were repaid in full with the proceeds from the First SVB Facility.

The First SVB Facility also contained a revolving credit facility with $25,000 of available borrowings. As of January 31, 2020 and as of the date of the Second SVB Facility, the Company had no borrowings outstanding under the revolving credit facility. The Company was required to pay an annual fee of $100 per year during the first three years of the facility and then $75 per year in years four and five. The first two facility fee payments of $100 were paid during the three months ended July 31, 2020 and 2019, respectively. The Company was required to pay a fee of 0.15% per year for any unused availability and a termination fee of 1.50% if the revolving credit agreement was terminated prior to its scheduled maturity.

Upon entering into the First SVB Facility, during the six months ended July 31, 2019, the Company accounted for the settlement of the previously outstanding loans payable and the term loan as a debt extinguishment and recorded an expense of $1,073, which was included in other income (expense), and was comprised of the write-off of $773 of deferred financing costs and a $300 prepayment fee related to the loans outstanding under the previous credit agreement. The modification of the previously outstanding revolving line of credit was accounted for as an insubstantial modification. The Company incurred fees of $112 related to the extinguishment and modification.

Finance Leases

See Note 11 - Leases for more information regarding finance leases.

Other Debt (Financing Agreements)

On July 21, 2020, the Company entered into an insurance premium financing agreement with IPFS of New York LLC in order to finance its premium payments for Directors' and Officers' insurance. As of July 31, 2020, the outstanding principal amount under the agreement is $2,009. The agreement bears interest of 2.6% per annum. Principal and interest are due in three equal installments of $677, payable in September 2020, December 2020 and March 2021. The total interest to be paid under the arrangement is $22.

On April 10, 2020, the Company entered into a vendor financing agreement with a principal amount of $174 to finance the acquisition of certain internal use software licenses. As of July 31, 2020, the outstanding principal balance of the financing agreement is $131. Interest accrues at an annual rate of 2.94%. The Company is required to make equal annual payments of $46 on May 31, 2021, May 31, 2022 and May 31, 2023.

On November 2, 2018, the Company entered into a vendor financing agreement with a principal amount of $1,256 to finance the acquisition of certain internal use software licenses. As of July 31, 2020, the outstanding principal

balance of the financing agreement is $658. Interest accrues at an annual rate of 8.79%. The Company is required to pay four equal payments of $183 in January and June 2021 and 2022.

Maturities of debt, including finance leases, in each of the next five years and thereafter are as follows:


	Total		Debt		Finance Leases
Fiscal 2021 (remaining six months)	$	2,835	$	1,500	$	1,335
Fiscal year ending January 31:
2022	3,193		1,036		2,157
2023	1,649		217		1,432
2024	630		44		586
2025	21,156		20,697		459
Total long-term debt and finance lease maturities	$	29,463	$	23,494	$	5,969

During the three and six months ended July 31, 2020, the Company recorded net interest expense of $419 and $739, respectively, including amortization of original issue discount and deferred financing costs of $119 and $245, respectively. For the three months ended July 31, 2020, net interest expense included interest expense of $421, net of interest income of $2. For the six months ended July 31, 2020, net interest expense included interest expense of $833, net of interest income of $94. During the three and six months ended July 31, 2019, the Company recorded net interest expense of $745 and $1,549, respectively, including amortization of original issue discount and deferred financing costs of $157 and $265, respectively For the three months ended July 31, 2019, net interest expense included interest expense of $781, net of interest income of $36. For the six months ended July 31, 2019, net interest expense included interest expense of $1,585, net of interest income of $36.