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Note 13 - Subsequent Events | 3 Months Ended
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Mar. 31, 2020
Notes to Financial Statements |
Subsequent Events [Text Block] |
( 1 3 ) | SUBSEQUENT EVENTS
Line of Credit As previously mentioned in Notes 1 and 8, on April 10, 2020 ( the “Closing Date”), we entered into the Agreement with M&T. Under the terms of the Agreement, M&T has provided us with a $7,500 revolving credit facility under which our domestic subsidiaries, Ambrell, EMS LLC, Temptronic and Silicon Valley, are guarantors (collectively, the “Guarantors”). The revolving credit facility has a 364 -day contract period that began on the Closing Date and expires on April 9, 2021 ( the “Contract Period”). The principal balance of the revolving credit facility will accrue interest at the LIBOR rate plus 2.5%. In the event the current LIBOR rate is no longer available or representative, the Agreement includes a mechanism for providing an alternate benchmark. Interest payments are due on a monthly basis, and principal payments are due, along with any accrued and unpaid interest thereon, on the earlier of (a) the expiration of the Contract Period, or (b) on demand if a continued event of default occurs. The Agreement contains customary default provisions including, but not limited to, the failure by us to repay obligations when due, violation of provisions or representations provided in the Agreement, bankruptcy of inTEST Corporation, suspension of the business of inTEST Corporation or any of our subsidiaries and certain material judgments. After expiration of the Contract Period, or if a continued event of default occurs, interest will accrue on the principal balance at a rate of 2% in excess of the then applicable non-default interest rate. Our obligations under the Agreement are secured by liens on substantially all our tangible and intangible assets that are owned as of the Closing Date, as defined in the Agreement, or acquired thereafter. The Agreement includes customary affirmative, negative and financial covenants, including a maximum ratio of assets to liabilities and a fixed charge coverage ratio. This facility was put in place to provide us with additional liquidity in response to the current business environment, as a result of the COVID- 19 pandemic. As of the date of this filing, we have drawn down $2,800 on our revolving credit facility. Paycheck Protection Program Loans On April 16, 2020, we entered into a Term Note (the “Company PPP Note”) with M&T pursuant to the Paycheck Protection Program (the “PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) administered by the U.S. Small Business Administration (the “SBA”). Our wholly owned subsidiaries, Ambrell, EMS LLC, Temptronic and Silicon Valley (collectively with the Company, the “Borrowers”), each also entered a Term Note with M&T (each, a “PPP Note” and collectively with the Company PPP Note, the “PPP Notes”) pursuant to the PPP of the CARES Act. Each of the PPP Notes was dated April 16, 2020, except for the EMS LLC PPP Note, which was dated April 14, 2020. The total principal amount of the PPP Notes was $2,829. The Borrowers intended to use the proceeds of the PPP Notes for certain qualified expenses, including payroll costs, rent and utility costs in accordance with the relevant terms and conditions of the PPP under the CARES Act. Interest accrued on each of the PPP Notes at the rate of 1.00% per annum. Subject to any forgiveness under the PPP, each of the PPP Notes were to mature two years following the date of issuance of the PPP Note and included a period for the first six months during which time required payments of interest and principal were to be deferred. Beginning on the seventh month following the date of the PPP Notes, each Borrower was required to make 18 monthly payments of principal and interest. The PPP Notes could be prepaid at any time prior to maturity with no prepayment penalties. The PPP Notes provide for customary events of default, including, among others, those relating to failure to make payments, bankruptcy, breaches of representations and material adverse effects. The Borrowers did not provide any collateral or guarantees for the PPP Notes. The Borrowers applied for the PPP Notes in good faith after carefully reviewing the Borrowers’ financial condition, and the economic impact and uncertainty caused by the COVID- 19 pandemic and determining that at that time the funds were necessary to maintain ongoing operations. Due to the new and changing guidance and statements from the SBA and U.S. Department of Treasury issued after the Borrowers applied for and entered into the PPP Notes, the Borrowers determined that they would repay the PPP Notes. Accordingly, on May 5, 2020, in light of the SBA’s new guidance, the Borrowers repaid the full amount of the PPP Notes to M&T along with the applicable interest.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 855 -URI http://asc.fasb.org/topic&trid=2122774 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 855 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6842918&loc=SL6314017-165662 + Details
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