Debt

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Debt

Debt

The following table summarizes the outstanding promissory notes as of March 31, 2023 and December 31, 2022 (dollars in thousands):

		March 31, 2023				December 31, 2022
	Interest Rate	Principal Amount		Carrying Amount		Principal Amount		Carrying Amount
YA II PN Convertible Debenture due 2/24/2023	4.0%	$	250	$	250	$	4,442	$	3,928
YA II PN Convertible Debenture due 9/30/2023	4.0%	1,400		1,400		—		—
Tillou promissory note due on demand after 1/15/2023	20.0%	—		—		2,000		2,021
Tillou promissory note due on demand after 4/20/2023	20.0%	2,000		2,014		—		—
Commercial Insurance Premium Finance	5.5%-6.2%	905		905		1,335		1,335
SBA PPP due April 10, 2025	1.0%	195		195		219		219
Other lending agreements	1.0%-12%	6,999		7,017		7,673		7,673
Total		$	11,749	11,781		$	15,669	15,176
Less: Current portion				(9,887)				(13,219)
Long-term Note, less current portion				$	1,894			$	1,957

The weighted average interest rate for these borrowings is 7.6% and 8.1% as of March 31, 2023 and December 31, 2022, respectively.

The Company recognized interest expense related to the YA II PN convertible debenture due February 24, 2023 of $0.5 million, including of $0.5 million debt discount amortization for the three months ended March 31, 2023.

The Company breached at least two covenants, including making timely SEC filings and a minimum stock purchase from the Company’s officers or directors. Yorkville has not asserted either breach and has since extended additional loan amounts to the Company.

New debt transactions executed by the Company during the three months ended March 31, 2023 are as follows:

(a) YA II PN Convertible Debenture due 9/30/2023

On March 30, 2023, the Company entered into the first Amendment to the SDPA for the Company to sell and YA II PN to purchase convertible debentures pursuant to an exemption from registration pursuant to Section 4(a)(2) and/or Rule 506 of Regulation D (“Regulation D”) as promulgated by the SEC. Under the amended SDPA, YA II PN purchased an additional debenture with substantially the same terms in the principal amount of $1.4 million.

(b) Tillou promissory note due on demand after 4/20/2023

Refer to Note 11 for further discussion of this related party transaction.

The Company also entered other short term and long term borrowing agreements. These instruments provide working capital for the operations through the combination of accounts receivable factoring, line of credits, vendor financing programs and other secured asset-based lending arrangements. The total unused line of credit is $1.1 million and $0.4 million as of March 31, 2023 and December 31, 2022, respectively.