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Long Term Debt | 9 Months Ended
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Sep. 30, 2022
Debt Disclosure [Abstract] |
Long Term Debt | 8. Long Term Debt Long-term debt consists of the following: Schedule of Long Term Debt
(Amounts in Thousands) |  | September 30, 2022 |  |  | December 31, 2021 |
Revolving Credit facility dated May 8, 2020, borrowings based upon eligible accounts receivable, subject to monthly borrowing base calculation, balance due on May 15, 2024. Effective interest rate for first nine month of 2022 was 0%. (1) |  | $ | — |  |  | $ | — |
Revolving Credit facility dated May 8, 2020, borrowings based upon eligible accounts receivable, subject to monthly borrowing base calculation, balance due on May 15, 2024. Effective interest rate for first nine month of 2022 was 0%. (1) |  | $ | — |  |  | $ | — |
Term Loan dated May 8, 2020, payable in equal monthly installments of principal, balance due on May 15, 2024. Effective interest rate for the first nine month of 2022 was 4.8%. (1) |  |  | 642 |  | (2) |  | 954 | (2)
Capital Line dated May 4, 2021, payable in equal monthly installments of principal, balance due on May 15, 2024. Effective interest rate for the first nine month of 2022 was 5.3%. (1) |  |  | 480 |  |  |  | — |
Notes Payable to 2023 and 2025, annual interest rate of 5.6% and 9.1%. |  |  | 28 |  |  |  | 39 |
Total debt |  |  | 1,150 |  |  |  | 993 |
Less current portion of long-term debt |  |  | 469 |  |  |  | 393 |
Long-term debt |  | $ | 681 |  |  | $ | 600 |
(1) | Our revolving credit facility is collateralized by our accounts receivable and our term loan and capital line are collateralized by our property, plant, and equipment.
(2) | Net of debt issuance costs of ($104,000) and ($112,000) at September 30, 2022 and December 31, 2021, respectively.
Revolving Credit, Term Loan and Capital Line Agreement The Company entered into a Second Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated May 8, 2020 (“Loan Agreement”), with PNC National Association (“PNC”), acting as agent and lender. The Loan Agreement provided the Company with the following credit facility with a maturity date of March 15, 2024: (a) up to $18,000,000 revolving credit (“revolving credit”) and (b) a term loan (“term loan”) of approximately $1,742,000, requiring monthly installments of $35,547. The maximum that the Company can borrow under the revolving credit is based on a percentage of eligible receivables (as defined) at any one time reduced by outstanding standby letters of credit and borrowing reductions that the Company’s lender may impose from time to time. The Loan Agreement, as amended (the “Amended Loan Agreement”), also provides a capital expenditure line of up to $1,000,000 with advances on the line, subject to certain limitations, permitted for up to twelve months starting May 4, 2021 (the “Borrowing Period”). Only interest is payable on advances during the Borrowing Period. At the end of the Borrowing Period, the total amount advanced under the line will amortize equally based on a five-year amortization schedule with principal payment due monthly plus interest. At the maturity date of the Amended Loan Agreement, any unpaid principal balance plus interest, if any, will become due. Amount advanced under the capital line totaled approximately $524,000 which requires monthly installments in principal of approximately $8,700 plus interest, starting June 1, 2022. The advance was used to purchase the underlying asset under a previous finance lease. On March 29, 2022, the Company entered into an amendment to its Amended Loan Agreement with its lender which provided, among other things, the following:
| ● | waived the Company’s failure to meet the minimum quarterly fixed charge coverage ratio (“FCCR”) requirement for the fourth quarter of 2021;
| ● | removes the quarterly FCCR testing requirement for the first quarter of 2022;
| ● | reinstates the quarterly FCCR testing requirement starting for the second quarter of 2022 and revises the methodology to be used in calculating the FCCR for the quarters ending June 30, 2022, September 30, 2022, and December 31, 2022 (with no change to the minimum 1.15:1 ratio requirement for each quarter);
| ● | requires maintenance of a minimum of $3,000,000 in borrowing availability under the revolving credit until the minimum FCCR requirement for the quarter ended June 30, 2022 has been met and certified to the lender; and
| ● | revises the annual rate used to calculate the Facility Fee (as defined in the Loan Agreement) on the revolving credit, with addition of the capital expenditure line, from 0.375% to 0.500%. Upon meeting the minimum FCCR requirement of 1.15:1 on a twelve month trailing basis, the Facility Fee rate of 0.375% will be reinstated.
In connection with the amendment, the Company paid PNC a fee of $15,000 which is being amortized over the remaining term of the Amended Loan Agreement as interest expense-financing fees. On August 2, 2022, the Company entered into an amendment to its Amended Loan Agreement with its lender which provided the following, among other things:
| ● | waived the Company’s failure to meet the minimum quarterly FCCR requirement for the second quarter of 2022;
| ● | removes the quarterly FCCR testing requirement for the third quarter of 2022;
| ● | reinstates the quarterly FCCR testing requirement starting for the fourth quarter of 2022 and revises the methodology to be used in calculating the FCCR for the quarters ending December 31, 2022 and March 31, 2023 (with no change to the minimum 1.15:1 ratio requirement for each quarter);
| ● | requires maintenance of a minimum of $3,000,000 in borrowing availability under the revolving credit until the minimum FCCR requirement for the quarter ended December 31, 2022 has been met and certified to the lender.
In connection with the amendment, the Company paid PNC a fee of $15,000 which is being amortized over the remaining term of the Amended Loan Agreement as interest expense-financing fees. The Company’s credit facility under its Amended Loan Agreement with PNC contains certain financial covenants, along with customary representations and warranties. A breach of any of these financial covenants, unless waived by PNC, could result in a default under our credit facility allowing our lender to immediately require the repayment of all outstanding debt under our credit facility and terminate all commitments to extend further credit. The Company was not required to perform testing of the FCCR requirement in the first and third quarters of 2022 pursuant to the March 29, 2022 and August 2, 2022 amendments, respectively, as discussed above. The Company failed to meet its FCCR requirement in the second quarter of 2022; however, this non-compliance was waived by the Company’s lender pursuant to the August 2, 2022 amendment as discussed above. Other than the FCCR covenant discussion above, the Company met all of its other financial covenant requirements in the first, second and third quarters of 2022. On August 29, 2022, the Company entered into an amendment to its Amended Loan Agreement with its lender which set forth certain revisions to the Amended Loan Agreement, with the amended terms set forth in a revised Loan Agreement. The new revisions to the Amended Loan Agreement (the “Revised Loan Agreement”), among other things, replace the LIBOR based interest rate benchmark with the SOFR and add certain additional anti-terrorism provisions to the covenants contained in the Amended Loan Agreement. As a result of this amendment, payment of annual rate of interest due on the revolving credit is at prime (6.25% at September 30, 2022) plus 2% or Term SOFR Rate (as defined in the Revised Loan Agreement) plus 3.00% plus an SOFR Adjustment applicable for an interest period selected by the Company and payment of annual rate of interest due on the term loan and the capital expenditure line is at prime plus 2.50% or Term SOFR Rate plus 3.50% plus an SOFR Adjustment applicable for an interest period selected by the Company. Pursuant to the Revised Loan Agreement, SOFR Adjustment rates of 0.10% and 0.15% are applicable for a one-month interest period and three-month period, respectively, that may be selected by the Company. After May 7, 2022, the Company may terminate its Revised Loan Agreement upon 90 days’ prior written notice upon payment in full of our obligations under the Revised Loan Agreement with no early termination fees. At September 30, 2022, the borrowing availability under the Company’s revolving credit was approximately $4,548,000 based on our eligible receivables and is net of approximately $3,016,000 in outstanding standby letters of credit.

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