Quarterly report pursuant to Section 13 or 15(d)

Notes Payable

v3.22.2
Notes Payable
 6 Months Ended
May 31, 2022
Debt Disclosure [Abstract]  
Notes Payable

Note 5 – Notes Payable

On August 20, 2016, the Company entered into a Credit Agreement (“Credit Agreement”) with Texas Capital Bank, National Association (“TCB”) for a term loan of $8.0 million in senior credit facilities. The proceeds of the term loan were used by the Company to fund repurchases of the Company’s common stock. Subject to the terms of the Credit Agreement, on August 20, 2016, TCB advanced the Company $100.00. On July 1, 2016, TCB advanced the remaining principal amount of $7,999,900 per a promissory note dated August 20, 2016 between the Company and TCB, at a rate of 3.75% per annum plus LIBOR, payable monthly with a maturity date of July 2021 which was extended to June 2022 pursuant to the Second Amendment to Credit Agreement discussed below. On August 26, 2016, the Company entered into a First Amendment to Credit Agreement with TCB. Pursuant to terms of the First Amendment to Credit Agreement, on August 26, 2016, TCB made an additional advance to the Company in the principal amount of $2,133,433 per an Amended and Restated Promissory Note dated August 26, 2016 between the Company and TCB. The additional proceeds of the term loan were used by the Company to fund the extinguishment of revenue sharing agreements. On June 11, 2018, the Company entered into a Second Amendment to Credit Agreement with TCB. Pursuant to the terms of the Second Amendment to Credit Agreement, TCB increased the current outstanding principal amount of the loan from TCB by $9,000,000 to finance a portion of the purchase price of the Cord:Use Purchase. In connection therewith, Cryo-Cell executed and delivered to TCB a Second Amended and Restated Promissory Note, in the principal amount of $15,500,000. As of the three and six months ended May 31, 2022, the Company paid interest of $5,969 and $18,115, respectively, which is reflected in interest expense on the accompanying consolidated statements of income. As of the three and six months ended May 31, 2021, the Company paid interest of $32,894 and $73,432, respectively, which is reflected in interest expense on the accompanying consolidated statements of income.

Collateral of the term and subordinated loans includes all money, securities and property of the Company.

The Company incurred debt issuance costs related to the term loan in the amount of $548,085 which is recorded as a direct reduction of the carrying amount of the note payable and amortized over the life of the loan. As of the three and six months ended May 31, 2022, $3,388 and $9,777, respectively, of the debt issuance costs were amortized and are reflected in interest expense on the accompanying consolidated statements of income. As of the three and six months ended May 31, 2021, $15,390 and $35,072, respectively, of the debt issuance costs were amortized and are reflected in interest expense on the accompanying consolidated statements of income.

As of May 31, 2022 and November 30, 2021, the note payable obligation was as follows:

 

 

 

May 31, 2022

 

 

November 30, 2021

 

Note payable

 

$

358,433

 

 

$

1,908,433

 

Unamortized debt issuance costs

 

 

(591

)

 

 

(10,368

)

Net note payable

 

$

357,842

 

 

$

1,898,065

 

 

Interest expense on the note payable for the three and six months ended May 31, 2022 and 2021 was as follows:

 

 

 

For the three months ended

 

 

For the six months ended

 

 

 

May 31, 2022

 

 

May 31, 2022

 

Interest expense on notes payable

 

$

5,969

 

 

$

18,115

 

Debt issuance costs

 

 

3,388

 

 

 

9,777

 

Total interest expense

 

$

9,357

 

 

$

27,892

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended

 

 

For the six months ended

 

 

 

May 31, 2021

 

 

May 31, 2021

 

Interest expense on notes payable

 

$

32,894

 

 

$

73,432

 

Debt issuance costs

 

 

15,390

 

 

 

35,072

 

Total interest expense

 

$

48,284

 

 

$

108,504

 

 

As of July 1, 2022, subsequent to the balance sheet date, the Company paid the term loan in full. The Company has no further obligations under the Credit Agreement. The Company currently is considering financing alternatives and expects to enter into a new credit facility in July 2022. See "Risk Factors."