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Subsequent Events
6 Months Ended
Jun. 30, 2023
Subsequent Events [Abstract]  
Subsequent Events

12. Subsequent Events

On August 1, 2023, the Company entered into a Purchase and Sale Agreement (the “Purchase Agreement”) with MyPlanAdvocate Insurance Solutions Inc. (the “Buyer”), a Delaware corporation, pursuant to which the Company agreed to sell to the Buyer assets relating to its health insurance vertical, by selling to the Buyer all of the issued and outstanding membership interests of its subsidiary, Eversurance, LLC (“Eversurance”), for cash consideration of $13.2 million, subject to customary post-closing adjustments. Among the assets sold were $32.2 million of commissions receivable as of June 30, 2023, which were expected to be collected over the next seven years, long-lived assets with a net book value of $1.1 million as of June 30, 2023 and the Evansville, Indiana office lease. The transaction closed concurrently with execution of the Purchase Agreement. There were no employees of Eversurance at the time of the sale.

In connection with the sale of Eversurance, the Company entered into a Loan and Security Modification Agreement (the “2023 Consent and Release”), pursuant to which the Lender consented to the sale of Eversurance and released any security interests it had in the membership interests of Eversurance.

On August 7, 2023, the Company executed a Loan and Security Modification Agreement (the “2023 Loan Amendment”) to amend the 2022 Amended Loan Agreement to, among other things, eliminate the term loan availability, decrease the revolving line of credit from $35.0 million to $25.0 million, update the interest rate on outstanding borrowings to the greater of 7.0% or the prime rate as published in The Wall Street Journal and update certain financial and other covenants. The 2022 Loan Agreement, as amended by the 2023 Consent and Release and the 2023 Loan Amendment, is referred to as the “2023 Amended Loan Agreement.” Pursuant to the 2023 Loan Amendment the minimum asset coverage ratio, fixed charge coverage ratio and leverage ratio covenants have been eliminated and replaced with an adjusted quick ratio covenant. As of the effective date of the 2023 Loan Amendment and through the maturity date, the Company is required to maintain a minimum adjusted quick ratio of 1.10 to 1.00 defined as (1) the sum of (x) unrestricted cash and cash equivalents held at the Lender plus (y) net accounts receivable reflected on the Company’s balance sheet to (2) current liabilities, including all borrowings outstanding under the 2023 Amended Loan Agreement, but excluding the current portion of deferred revenue, in each case determined in accordance with GAAP) (the “Adjusted Quick Ratio”). At any time the Adjusted Quick Ratio is less than 1.30 to 1.00 the Lender shall have the ability to use the Company's cash receipts to repay outstanding obligations until such time as the Adjusted Quick Ratio is equal to or greater than 1.30 to 1.00 for two consecutive months.