Quarterly report pursuant to Section 13 or 15(d)

Term Loan

v3.22.2
Term Loan
3 Months Ended
Jun. 25, 2022
Debt Disclosure [Abstract]  
Term Loan

Note 6. Term Loan

On November 12, 2021, the Company borrowed $500,000 from DPL and an affiliate of BitNile, a Delaware corporation. On January 7, 2022, the Company borrowed an additional $300,000 from DPL.

On April 5, 2022, the Company (1) borrowed an additional $500,000 from DPL, (2) amended its Share Exchange Agreement and issued a warrant to Gresham. The Share Exchange Agreement and the warrant issued to Gresham are described in Note 18 – Share Exchange Agreement with BitNile and Gresham.

The loan is evidenced by a secured promissory note dated April 5, 2022 that provides, among other things that the principal amount of the loan will bear interest at the rate of 10.0% per annum. Unless prepaid by the Company, all principal and accrued interest under the loan is payable on November 12, 2022 or, if earlier, upon the Company’s completion of an underwritten public offering or the

termination of the Share Exchange Agreement. The Company’s obligations under the loan are secured by a pledge of all of the Company’s assets. The loan and the lender’s security interest are subordinate to the Company’s existing bank lending arrangement.

As of June 25, 2022, and March 26, 2022, the Company’s total outstanding loan balance was $1,300,000 and $800,000, respectively, and are included in Loans payable, net of discounts and issuance costs on the unaudited condensed consolidated Balance Sheets.

On April 5, 2022, the Company borrowed an additional $500,000 from DPL and the Company and DPL entered into an Amended and Restated Secured Promissory Note and an amendment to the Security and Pledge Agreement originally dated as of November 12, 2021 to reflect that the Company has borrowed an aggregate of $1,300,000 from DPL. The Company intends to use the additional loan proceeds for general corporate purposes. The other material terms of the Loan remain unchanged.

This description is qualified by the Amended and Restated Secured Promissory Note, the Security and Pledge Agreement with DPL and the amendment thereto, copies of which are filed as exhibits to this report and incorporated by reference herein.