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DEBT | 3 Months Ended
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Mar. 31, 2025
Debt Disclosure [Abstract] |
DEBT | DEBT Letters of Credit We have issued letters of credit as the security deposits for certain of our domestic leases. These letters of credit are secured by pledged certificates of deposit which are classified as Restricted Certificates of Deposit on our balance sheets. The terms of our leases require us to renew these letters of credit at least 30 days prior to their expiration dates for successive terms of not less than one year until lease expiration. Our outstanding letters of credit at March 31, 2025, and December 31, 2024, consisted of the following:
(in thousands) |  |  |  | L/C |  | Lease |  | Letters of Credit Amount Outstanding
Facility |  | Original L/C Issue Date |  | Expiration Date |  | Expiration Date |  | Mar. 31, 2025 |  | Dec. 31, 2024
Mt. Laurel, NJ |  | 3/29/10 |  | 4/30/26 |  | 4/30/31 |  | $ | 50 |  |  | $ | 50 |
Mansfield, MA |  | 10/27/10 |  | 12/31/25 |  | 2/29/32 |  | 50 |  |  | 50 |
|  |  |  |  |  |  |  | $ | 100 |  |  | $ | 100 |
Credit Facility On October 15, 2021 (the “Closing Date”), we entered into an Amended and Restated Loan and Security Agreement with M&T Bank (“M&T”) which, was subsequently amended on October 28, 2021, December 30, 2021, September 20, 2022, May 2, 2024, and December 18, 2024 (together as amended, the “Loan Agreement”). The Loan Agreement includes a $50.5 million non-revolving delayed draw term note (the “Term Note”) and a $10.0 million revolving credit facility (the “Revolving Facility” and together with the Term Note, the “Credit Facility”). The available funding at March 31, 2025, under the Term Note was $30 million and we have not borrowed any amounts under the $10.0 million Revolving Facility. The Credit Facility has a five-year contract period that began on October 15, 2021, and, as amended, expires on May 2, 2031, and draws under the Term Note, as amended, are permissible until May 2, 2026. The principal balance of the Revolving Facility and the principal balance of any amount drawn under the Term Note accrues interest based on the secured overnight financing rate for U.S. government securities (“SOFR”) or a bank-defined base rate plus an applicable margin, depending on leverage. Each draw under the Term Note will have an option for us of either (i) up to a five-year amortizing term loan with a balloon due at maturity, or (ii) up to a five-year term with up to seven years amortization with a balloon due at maturity. Any amortization greater than five years will be subject to an excess cash flow recapture. The Loan Agreement also allows us to enter into hedging contracts with M&T, including interest rate swap agreements, interest rate cap agreements, interest rate collar agreements, or any other agreements or that are designed to protect us against fluctuations in interest rates or currency exchange rates. The Loan 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 Loan Agreement, bankruptcy by us, suspension of our business 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 nondefault interest rate. The Loan Agreement includes customary affirmative, negative and financial covenants, including a maximum ratio of consolidated funded debt to consolidated EBITDA of not more than 3.0 to 1.0 and a fixed charge coverage ratio of not less than 1.25 to 1.0. Our obligations under the Loan Agreement are secured by liens on substantially all of our tangible and intangible assets that are owned as of the Closing Date or acquired thereafter. At March 31, 2025, we were in compliance with all of the covenants included in the Loan Agreement, except for the fixed charge coverage ratio financial covenant which was 0.99 to 1.0 for the quarter ended March 31, 2025, for which we have received a one-time waiver from M&T on May 1, 2025. On October 28, 2021, we drew $12.0 million under the Term Note to finance the acquisition of Videology®. We also entered into an interest rate swap agreement with M&T as of this date which is designed to protect us against fluctuations in interest rates during the five-year repayment and amortization period. As a result, the annual interest rate we expect to pay for this draw under the Term Note is fixed at approximately 3.2% based on current leverage. On December 29, 2021, we drew $8.5 million under the Term Note to finance the acquisition of Acculogic. We did not enter into an interest rate swap agreement with M&T related to this draw. The annual interest rate we expect to pay for this draw under the Term Note is variable. At March 31, 2025, it was approximately 6.5% based on current leverage. The following table sets forth the annual maturities for the balance of the Term Note:
(in thousands) |  |
2025 (remainder) |  | $ | 3,075 |
2026 |  | 3,842 |
Total remaining maturities of our Term Note |  | $ | 6,917 |
Alfamation™ Debt In connection with the acquisition of Alfamation™ (see “Note (3) Acquisition”), we assumed debt which totaled $11.3 million as of the acquisition date. At March 31, 2025, Alfamation™’s total debt amounted to $4.9 million. This debt is comprised of both fixed and variable rate bank issued term loans as well as $1.1 million of short-term variable rate financing backed by Alfamation™’s accounts receivable. This debt is spread across several different institutions with monthly, quarterly or semi-annual repayment schedules. The short-term variable financing rate at March 31, 2025, was 3.5%. At March 31, 2025, the weighted average interest rate payable on the bank issued term loans was was 1.1% for fixed rate debt and 4.0% for variable rate debt and the overall weighted average interest rate for the bank issued term loans was 3.3%. The following table sets forth the maturities of this debt for each of the next four years:
(in thousands) |  |
2025 (remainder) |  | $ | 2,478 |
2026 |  | 1,352 |
2027 |  | 772 |
2028 |  | 309 |
Total remaining maturities of our Alfamation™ Debt |  | $ | 4,911 |
Total interest expense for the three months ended March 31, 2025 and 2024, related to our various debt arrangements was $0.2 million and $0.1 million, respectively.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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