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Bank Debt | 9 Months Ended
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Sep. 30, 2021
Bank Debt [Abstract] |
BANK DEBT | 10. BANK DEBT Prior to a refinancing with Gorham Savings Bank (GSB) during the first quarter of 2020, we had in place five different credit facilities and a line of credit with TD Bank N.A. (Loans #1 to #5). During the first quarter of 2020, we closed on a debt financing with GSB aggregating $8,600,000 and a $1,000,000 line of credit. The debt was comprised of a $5,100,000 mortgage note (Loan #6) that bears interest at a fixed rate of 3.50% per annum (with a 10-year term and 25-year amortization schedule and a balloon principal payment of $3,145,888 due during the first quarter of 2030) and a $3,500,000 note (Loan #7) that bears interest at a fixed rate of 3.50% per annum (with a 7-year term and amortization schedule). The line of credit is available as needed through March 10, 2022. Interest on borrowings against the line of credit is variable at the rate of the one-month LIBOR plus 2.15% per annum. There was no outstanding balance under this line of credit as of September 30, 2021 or December 31, 2020. In connection with these three credit facilities, we incurred debt issuance costs of $39,789. The amortization of debt issuance costs is being recorded as a component of interest expense, included with other expenses, net, and is being amortized over the underlying terms of the two notes and the line of credit. The proceeds from the debt refinancing were used to repay all bank debt outstanding at the time of closing (Loans #1 to #5) and to provide some additional working capital. We were required by bank debt covenant to maintain $1,400,000 in escrow (a non-current asset). During the fourth quarter of 2020, we closed on a $1,500,000 note with GSB (Loan #10) that bears interest at a fixed rate of 3.50% per annum (with a 7-year term and amortization schedule). In connection with this note, we incurred debt issuance costs of $11,075. The amortization of these debt issuance costs is also being recorded as a component of interest expense, included with other expenses, net, and is being amortized over the underlying term of the note. Proceeds of $624,167 were used to prepay a portion of the outstanding principal on our mortgage note (Loan #6), which reduced the outstanding balance to 80% of the most recent appraised value of the property securing the debt, which allowed GSB to release the $1,400,000 that had been held in escrow. This resulted in no change in the balloon principal payment of $3,145,888 due during the first quarter of 2030. The remaining proceeds were available for general working capital purposes. These three new credit facilities are secured by liens on substantially all of our assets and are subject to certain restrictions and financial covenants. Given the funds we raised through an equity issuance in April 2021, GSB waived the minimum debt service coverage ratio requirement of 1.35 for the year ending December 31, 2021. During the second quarter of 2020, we received $937,700 in support from the federal government under the Paycheck Protection Program (PPP) (Loan #8). We used the proceeds only for eligible payroll costs incurred and paid during the 24-week period beginning April 13, 2020. Our obligation to repay the principal was forgiven, and we recognized this amount as part of other (income) expenses, net, during the fourth quarter of 2020. This forgiveness of indebtedness, in accordance with the CARES Act, does not give rise to federal or State of Maine taxable income, and the expenses incurred using PPP proceeds are fully deductible for federal and Maine income tax purposes. During the second quarter of 2020, we received a loan from the Maine Technology Institute (MTI) (Loan #9) in the aggregate principal amount of $500,000. The first 27 months of this loan are interest-free with no interest accrual or required principal payments. Principal and interest payments at a fixed rate of 5% per annum are due quarterly over the final five years of the loan, beginning during the fourth quarter of 2022 and continuing through the third quarter of 2027. On June 30, 2021, we executed definitive agreements covering a second loan from the MTI (Loan #11) in the aggregate principal amount of $400,000, which proceeds were received in July 2021. The first 24 months of this loan are interest-free with no interest accrual or required principal payments. Beginning in July 2023, principal and interest payments are due quarterly at a fixed rate of 5% per annum based on a 5.5-year amortization schedule until December 2028.These credit facilities are unsecured and subordinated to our indebtedness to Gorham Savings Bank, which senior indebtedness is secured by mortgages and security interests with respect to substantially all of our assets. Failure to make timely payments of principal and interest, or otherwise to comply with the terms of the agreements with MTI, would entitle MTI to accelerate the maturity of such debt and demand repayment in full. These loans may be prepaid without penalty at any time. Debt proceeds received and principal repayments made during the years ended December 31, 2020 and 2019 are reflected in the following table by period and by loan:
|  | During the Year Ended December 31, 2020 |  |  | During the Year Ended December 31, 2019 |
|  | Proceeds from Debt Issuance |  |  | Debt Principal Repayments |  |  | Proceeds from Debt Issuance |  |  | Debt Principal Repayments |
Loan #1 |  | $ | — |  |  | $ | (493,696 | ) |  | $ | — |  |  | $ | (68,908 | )
Loan #2 |  |  | — |  |  |  | (2,143,771 | ) |  |  | — |  |  |  | (89,997 | )
Loan #3 |  |  | — |  |  |  | (3,236,429 | ) |  |  | — |  |  |  | (562,857 | )
Loan #4 |  |  | — |  |  |  | (2,336,000 | ) |  |  | — |  |  |  | (128,000 | )
Loan #5 |  |  | — |  |  |  | (309,182 | ) |  |  | — |  |  |  | (11,585 | )
Loan #6 |  |  | 5,100,000 |  |  |  | (720,001 | ) |  |  | — |  |  |  | — |
Loan #7 |  |  | 3,500,000 |  |  |  | (334,489 | ) |  |  | — |  |  |  | — |
Loan #8(1) |  |  | 937,700 |  |  |  | (937,700 | ) |  |  | — |  |  |  | — |
Loan #9 |  |  | 500,000 |  |  |  | — |  |  |  | — |  |  |  | — |
Loan #10 |  |  | 1,500,000 |  |  |  | — |  |  |  | — |  |  |  | — |
Loan #11 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 11,537,700 |  |  | $ | (10,511,268 | ) |  | $ | — |  |  | $ | (861,347 | )
| (1) | Loan #8 was forgiven by the federal government during the fourth quarter of 2020.
Debt proceeds received and principal repayments made during the three-month periods ended September 30, 2021 and 2020 are reflected in the following table by period and by loan:
|  | During the Three-Month Period Ended September 30, 2021 |  |  | During the Three-Month Period Ended September 30, 2020 |
|  | Proceeds from Debt Issuance |  |  | Debt Principal Repayments |  |  | Proceeds from Debt Issuance |  |  | Debt Principal Repayments |
Loan #6 |  | $ | — |  |  | $ | (28,840 | ) |  | $ | — |  |  | $ | (31,782 | )
Loan #7 |  |  | — |  |  |  | (115,456 | ) |  |  | — |  |  |  | (111,392 | )
Loan #8(1) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Loan #9 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Loan #10 |  |  | — |  |  |  | (48,061 | ) |  |  | — |  |  |  | — |
Loan #11 |  |  | 400,000 |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 400,000 |  |  | $ | (192,357 | ) |  | $ | — |  |  | $ | (143,174 | )
| (1) | Loan #8 was forgiven by the federal government during the fourth quarter of 2020.
Debt proceeds received and principal repayments made during the nine-month periods ended September 30, 2021 and 2020 are reflected in the following table by period and by loan:
|  | During the Nine-Month Period Ended September 30, 2021 |  |  | During the Nine-Month Period Ended September 30, 2020 |
|  | Proceeds from Debt Issuance |  |  | Debt Principal Repayments |  |  | Proceeds from Debt Issuance |  |  | Debt Principal Repayments |
Loan #1 |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (493,696 | )
Loan #2 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (2,143,771 | )
Loan #3 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (3,236,429 | )
Loan #4 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (2,336,000 | )
Loan #5 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (309,182 | )
Loan #6 |  |  | — |  |  |  | (86,342 | ) |  |  | 5,100,000 |  |  |  | (63,279 | )
Loan #7 |  |  | — |  |  |  | (343,868 | ) |  |  | 3,500,000 |  |  |  | (221,790 | )
Loan #8(1) |  |  | — |  |  |  | — |  |  |  | 937,700 |  |  |  | — |
Loan #9 |  |  | — |  |  |  | — |  |  |  | 500,000 |  |  |  | — |
Loan #10 |  |  | — |  |  |  | (143,156 | ) |  |  | — |  |  |  | — |
Loan #11 |  |  | 400,000 |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 400,000 |  |  | $ | (573,366 | ) |  | $ | 10,037,700 |  |  | $ | (8,804,147 | )
| (1) | Loan #8 was forgiven by the federal government during the fourth quarter of 2020.
Principal payments (net of debt issue costs) due under bank loans outstanding as of September 30, 2021 (excluding our $1,000,000 line of credit) are reflected in the following table by the year that payments are due:
|  | During the Three-Month Period Ending December 31, |  |  | During the Years Ending December 31, |
|  | 2021 |  |  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2025 |  |  | 2026 |  |  | Thereafter |  |  | Total |
Loan #6 |  | $ | 29,515 |  |  | $ | 120,291 |  |  | $ | 124,629 |  |  | $ | 128,725 |  |  | $ | 133,768 |  |  | $ | 138,592 |  |  | $ | 3,618,137 |  |  | $ | 4,293,657 |
Loan #7 |  |  | 116,755 |  |  |  | 477,220 |  |  |  | 494,433 |  |  |  | 512,102 |  |  |  | 530,738 |  |  |  | 549,881 |  |  |  | 140,514 |  |  |  | 2,821,643 |
Loan #9 |  |  | — |  |  |  | 22,160 |  |  |  | 91,446 |  |  |  | 96,104 |  |  |  | 101,001 |  |  |  | 106,146 |  |  |  | 83,143 |  |  |  | 500,000 |
Loan #10 |  |  | 48,618 |  |  |  | 198,710 |  |  |  | 205,877 |  |  |  | 213,217 |  |  |  | 220,994 |  |  |  | 228,965 |  |  |  | 240,463 |  |  |  | 1,356,844 |
Loan #11 |  |  | — |  |  |  | — |  |  |  | 32,017 |  |  |  | 66,470 |  |  |  | 69,856 |  |  |  | 73,415 |  |  |  | 158,242 |  |  |  | 400,000 |
Subtotal |  |  | 194,888 |  |  |  | 818,381 |  |  |  | 948,402 |  |  |  | 1,016,618 |  |  |  | 1,056,357 |  |  |  | 1,096,999 |  |  |  | 4,240,499 |  |  |  | 9,372,144 |
Debt issuance costs |  |  | (1,960 | ) |  |  | (6,175 | ) |  |  | (5,768 | ) |  |  | (5,768 | ) |  |  | (5,769 | ) |  |  | (5,768 | ) |  |  | (8,663 | ) |  |  | (39,871 | )
Total |  | $ | 192,928 |  |  | $ | 812,206 |  |  | $ | 942,634 |  |  | $ | 1,010,850 |  |  | $ | 1,050,588 |  |  | $ | 1,091,231 |  |  | $ | 4,231,836 |  |  | $ | 9,332,273 |

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (h) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (g) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1E -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (i) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 + Details
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