Investment in Convertible Notes

6 Months Ended

Jun. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Investment in Convertibles Notes

Investment in Convertible Notes

On July 19, 2019, the Company entered into an agreement to purchase up to $30.0 million in convertible promissory notes from another terminal operator that bear interest at 3% per annum. The Company has the option of converting the notes to common stock of the terminal operator prior to the maturity date. At closing, the Company purchased a $5.0 million convertible promissory note which is subordinated to the terminal operator’s credit facility and matures six months following the satisfaction of administrative conditions.

On October 11, 2019, the Company purchased an additional $25.0 million convertible promissory note which is also subordinated to the terminal operator’s credit facility and, beginning on July 1, 2020, the balance of this note, if not previously converted, was payable in equal $1,000,000 monthly installments until all principal was repaid in full.

On July 30, 2020, the Company and the terminal operator entered into the Omnibus Amendment (the “Amendment”) to the original agreement to purchase convertible promissory notes from the terminal operator. The Amendment, among other things, extended the maturity date of the $5.0 million convertible promissory note and the beginning of the payback period for the $25.0 million convertible promissory note until December 31, 2020.

On March 9, 2021, the Company and the terminal operator entered into the Second Omnibus Amendment (the “Second Amendment”) to both of the convertible promissory notes and the agreement to purchase the convertible promissory notes. The Second Amendment, among other things, extends the December 31, 2020 maturity and conversion feature of the $5.0 million convertible promissory note to December 31, 2021, the maturity and conversion feature of the $25.0 million convertible promissory note to June 1, 2024 and the beginning of the payback period for the $25.0 million convertible promissory note from December 31, 2020 to January 1, 2022.

The Company recognized an unrealized gain of $5.2 million and $5.7 million, net of taxes, within comprehensive income (loss) for the three and six months ended June 30, 2021, respectively. For more information on how the Company determined the fair value of the convertible promissory notes, see Note 12.

On July 30, 2021, the Company provided notice to the terminal operator that it was exercising its rights under the convertible promissory notes. See Note 19 for additional information.