|12 Months Ended|
Dec. 31, 2021
|Debt Disclosure [Abstract]|
On November 3, 2021, and in connection with the acquisition of Anthony's, the Company joined a credit agreement with a syndicate of commercial banks providing Anthony's with up to $71.8 million in financing (“Credit Agreement”), which is reflective of the $8.3 million that the Company paid down at the acquisition date. The Credit Agreement, which terminates on June 15, 2024, provides the Company with lender financing structured as a $57.8 million term loan, a $4 million revolving loan, and a $10 million delayed draw term loan facility (the “Delayed Draw Term Loan Facility”) provided by a related party and a significant shareholder. The terms of the Credit Agreement require the Company to repay the principal of the term loan in quarterly installments with the balance due at the maturity date, as follows:
The loan and revolving line of credit are secured by substantially all of the Company’s assets and incurs interest on outstanding amounts at 4.75% per annum through 6/15/2023 and 6.75% from 6/16/2023 through maturity. The Delayed Draw Term Loan Facility is a non-interest bearing loan and accordingly has been recorded at fair value which resulted in a debt discount of approximately $1.3 million which is being amortized over the period of the Delayed Draw Term Loan Facility. For the year ended December 31, 2021, the Company recorded $0.1 million as amortization of the debt discount which is included within interest expense in the accompanying consolidated statements of operations. Pursuant to the terms of an amendment to the Credit Agreement effective as of March 9, 2022, certain of the covenants of (i) the Company and Plastic Tripod, Inc., as the borrowers (the "Borrowers"), and (ii) the subsidiary guarantors (the "Guarantors") party to the Credit Agreement were amended, and the Borrowers and Guarantors agreed to pay incremental deferred interest of 2% per annum, in the event that the Credit Agreement is not repaid on or prior to June 15, 2023; provided, however, that if no event of default has occurred and is continuing then (1) no incremental deferred interest will be due if all of the obligations under the Credit Agreement have been paid on or prior to December 31, 2022, and (2) only 50% of the incremental deferred interest will be owed if all of the obligations under the Credit Agreement have been paid from and after January 1, 2023 and on or prior to March 31, 2023.
For the year ended December 31, 2021, the Company deferred $1.0 million of financing costs in connection with its Credit Agreement. Amortization expense associated with deferred financing costs, in the amount of $0.1 million for the year ended December 31, 2021 is included in interest expense in the accompanying consolidated statements of operations.
Note payable relates to a note payable to an individual, issued in connection with the Company’s acquisition of a franchised restaurant, which requires monthly payments of $9,000 over a seven-year amortization including 7% interest, with a maturity date of May 1, 2027. The other notes payable relates to an Economic Injury Disaster Loan from the Small Business Administration (“SBA”) and is primarily for one corporate-owned restaurant.
Line of Credit
The Company had a revolving line of credit agreement (“LOC”) of $5 million. In January 2021, the Company terminated the LOC and paid the total amount due of $3 million. As of December 31, 2020, the outstanding balance on the LOC was $3 million. The annual interest on advances under the LOC was equal to the LIBOR Daily Floating rate plus 0.75%.
On May 11, 2020, the Company received loan proceeds in the amount of $2.2 million under the Paycheck Protection Program (“PPP”). During the year ended December 31, 2021, all PPP loans amounting to $2.2 million were forgiven by the SBA. The SBA may undertake a review of a loan of any size during the six‐year period following forgiveness of the loan; however, loans in excess of $2 million are subject to a mandatory audit. The audit will include the loan forgiveness application, as well as whether the Company met the eligibility requirements of the program and received the proper loan amount. The timing and outcome of any SBA review is not known.
The following table represents the future annual principal obligations under our various debt instruments as of December 31, 2021:
The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef