XML 26 R16.htm IDEA: XBRL DOCUMENT v3.22.2.2
Debt
 9 Months Ended
Sep. 30, 2022
Debt Disclosure [Abstract]  
Debt DEBT
The Company’s carrying value of debt, net of debt issuance costs at September 30, 2022 and December 31, 2021 consisted of the following (in thousands):
September 30,
2022		December 31,
2021
Secured term note, net of debt issuance costs$8,640 $7,608 
Secured promissory note - related party
3,022 3,603 
Insurance and other notes payable
1,085 855 
Less: amounts due within one year
(3,485)(2,023)
Total long-term debt
$9,262 $10,043 
Secured Term Note
On April 8, 2021, the Company entered into a loan agreement (the “Loan Agreement”) with AmeriState Bank (“Lender”), as lender, pursuant to the United States Department of Agriculture, Business & Industry Loan Program, to provide for an advancing loan facility in the aggregate principal amount of up to $10.0 million (the “AmeriState Loan”), of which $9.0 million was drawn and outstanding as of September 30, 2022. The AmeriState Loan, which is in the form of a term loan facility, matures on April 8, 2031 and bears interest at 5.75% per annum through April 8, 2026, and the U.S. prime lending rate plus 2.5% per annum thereafter. The AmeriState Loan provides that proceeds from borrowings may be used for working capital purposes at the Company’s liquefaction plant in George West, Texas and related fees and costs associated with the AmeriState Loan.
Upon an Event of Default (as defined in the Loan Agreement), the Lender may (i) terminate its commitment, (ii) declare the outstanding principal amount of the Advancing Notes (as defined in the Loan Agreement) due and payable, or (iii) exercise all rights and remedies available to Lender under the Loan Agreement.
On April 8, 2021, Mile High LNG LLC, Stabilis GDS, Inc., Stabilis LNG Eagle Ford LLC and Stabilis Energy Services, LLC, each a wholly owned subsidiary of the Company (collectively, “Debtor”), entered into a Security Agreement and Assignment (the “Security Agreement”) in favor of the Lender. The Security Agreement grants to Lender a first priority security interest in the collateral identified therein, which includes specific equipment collateral owned by the Company.
Secured Promissory Note - Related Party
On August 16, 2019, the Company issued a secured promissory note to M/G Finance Co., Ltd., a related party, in the principal amount of $5.0 million, at an interest rate per annum of 6.0% until December 10, 2020, and 12.0% thereafter, maturing in December 2022. The secured promissory note was subsequently amended on September 20, 2021, and on March 9, 2022 to defer scheduled debt and interest payments, reduce the interest rate and extend the maturity date. Payments under the secured promissory note, as amended, resume in October 2022 and will be in equal monthly installments through December 2023. The secured promissory note, as amended, bears interest at 6.0%. The debt is secured by certain equipment of the Company.
Insurance and Other Notes Payable
The Company finances its annual commercial insurance premiums for its business and operations with a finance company. During the three and nine months ended September 30, 2022, the Company financed $1.4 million of insurance premiums with a short term note payable. The short term note payable requires monthly payments of principal and interest over ten months with interest at 5.75%. The Company's prior insurance note payable was paid in full August, 2022 and incurred interest of 3.95%. At September 30, 2022 and December 31, 2021, outstanding principal under the Company's insurance notes payable was $1.1 million and $0.9 million, respectively.
Interest Expense
During the three and nine months ended September 30, 2022 and 2021, the Company recorded interest expense on debt and capital lease as follows (in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Secured term note$143 $117 $408 $176 
Secured promissory note - related party
49 120 129 441 
Insurance and other notes payable
5 — 23 7 
Interest expense on debt197 237 560 624 
Other interest2 2 6 6 
Total interest expense$199 $239 $566 $630 
Certain of the agreements governing our outstanding debt have certain covenants with which we must comply. As of September 30, 2022, we were in compliance with all of these covenants.
Loan Forgiveness under the Paycheck Protection Program
In June 2021, the Company's loan pursuant to the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) of $1.1 million (the “PPP Loan”) was forgiven by the Small Business Administration. The Company recognized a gain on forgiveness of debt in the amount of $1.1 million which is included in other income (expense) within our Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021.