Annual report pursuant to Section 13 and 15(d)

LONG-TERM DEBT AND OTHER BORROWINGS, NET

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LONG-TERM DEBT AND OTHER BORROWINGS, NET
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
LONG-TERM DEBT AND OTHER BORROWINGS, NET LONG-TERM DEBT AND OTHER BORROWINGS, NET
The table below sets forth a summary of the Company’s outstanding long-term debt as of December 31, 2023 and 2022:
December 31,
(in thousands) 2023 2022
Term Loan - Whitehorse $ 185,000  N/A
Term Loan – UBS N/A 302,654 
Backstop Notes 120,000  120,000 
Other borrowings 561  2,754 
Total $ 305,561  $ 425,408 
Less: current portion of long-term debt (2,411) (5,345)
Less: debt issuance costs, net of accumulated amortization of $0.8 million and $8.5 million, respectively
 (2,911) (6,153)
Less: original issue discount (4,130) N/A
Total Long-term debt and other borrowings, net $ 296,109  $ 413,910 

Term Loan — WhiteHorse Capital Management, LLC (“WhiteHorse”)

On November 15, 2023, a subsidiary of the Company entered into a credit agreement with WhiteHorse that consisted of a senior secured term loan of $185.0 million (“Term Loan”) as well as a senior secured revolving credit facility of $25.0 million (the “Revolving Credit Facility” and, together with the Term Loan, the “Credit Facilities”). Borrowings under the Term Loan and the Revolving Credit Facility bear interest at a rate at the Company’s option of either (1) Term SOFR for a specified interest period (at the Company’s option) of one to three months plus an applicable margin of up to 6.50% or (2) a base rate plus an applicable margin of up to 5.50%. The Term SOFR rate is subject to a “floor” of 1.0%. The applicable margins for Term SOFR rate and base rate borrowings are each subject to a reduction to 6.25% and 6.00% if the Company maintains a first lien net leverage ratio of less than 2.25:1.00 and greater than or equal to 1.75:1.00 and less than 1.75:1.00, respectively. Interest is paid on the last business day of each quarterly interest period except at maturity.

Principal payments of approximately $0.5 million are due on the last business day of each quarter. The maturity date of the Credit Facilities is November 15, 2028.

The Credit Facilities are secured by substantially all of the Company’s subsidiaries’ assets. The Term Loan agreement restricts cash dividends and other distributions from the Company’s subsidiaries to the Company and also restricts the Company’s ability to pay cash dividends to its shareholders, and contains customary financial covenants related to maximum total debt to Adjusted EBITDA ratio and a first lien debt to Adjusted EBITDA ratio.

As of December 31, 2023, there were no amounts outstanding on the Revolving Credit Facility.

Term Loan and Revolving Credit Facility – UBS

On December 21, 2018, the Company entered into a credit agreement with UBS (as from time to time amended and supplemented) that consisted of a term loan of $315.0 million (the “Term Loan — UBS”), maturity date December 21, 2024, as well as a senior secured revolving credit facility of $30.0 million.

On November 15, 2023, the Company fully repaid the Term Loan — UBS and there were no amounts drawn or outstanding on the senior secured revolving credit facility with UBS.

Backstop Notes

On September 30, 2021, a subsidiary of the Company issued the first tranche of the Backstop Notes, consisting of $95.1 million in senior unsecured exchangeable notes to a lender and its affiliates. On October 28, 2021, the Company’s subsidiary issued a second and final tranche of Backstop Notes in the amount of $24.9 million. The Backstop Notes are guaranteed by the Company and are due September 30, 2028.

The Backstop Notes were issued at par and bear interest at a rate of 5.50% per annum which is paid semi-annually on March 30 and September 30 of each year, commencing on March 30, 2022. The Backstop Notes are exchangeable into common stock of the Company at $12.50 per share (the “Base Exchange Rate”) at any time at the option of the lender. At the Base Exchange Rate, the Notes are exchangeable for approximately 9.6 million shares of the Company’s common stock. The Base Exchange Rate may be adjusted for certain dilutive events or change in control events as defined by the Indenture (the “Adjusted Exchange Rate”). After September 30, 2023, if the Company’s shares are trading at a defined premium to the Base Exchange Rate or applicable Adjusted Exchange Rate, the Company may redeem the Backstop Notes for cash, force an exchange into shares of its common stock at an amount per share based on a time-value make whole table, or settle with a combination of cash and its common stock.
The Backstop Notes were issued pursuant to an indenture which contains financial covenants related to the Company’s maximum total debt to Adjusted EBITDA ratio.

Other borrowings

The Company’s “other borrowings” as set forth on the foregoing table regarding the Company’s long-term debt related solely to a premium finance agreement entered into on August 3, 2022, to purchase a Directors and Officers insurance policy with a two-year policy term. The original amount borrowed was approximately $3.6 million at a fixed rate of 4.6% per annum, amortized over twenty months. The premium finance agreement requires twenty fixed monthly principal and interest payments of approximately $0.2 million per month from August 15, 2022 to March 15, 2024. During the year ended December 31, 2023, principal payments of $2.2 million were paid under this agreement.

This borrowing was classified as short-term as of December 31, 2023, as the remaining principal balance was then due within the subsequent three months.

Future principal repayments

The table below sets forth the future principal repayments on all long-term debt as of December 31, 2023:

(in thousands) Principal Repayment
2024 $ 1,850 
2025 1,850 
2026 1,850 
2027 1,850 
2028 297,600 
Total $ 305,000