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Bank Debt | 9 Months Ended
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Sep. 30, 2022
Bank Debt [Abstract] |
BANK DEBT | 10. BANK DEBT During the first quarter of 2020, we closed on a debt financing with Gorham Savings Bank (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 #1) 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 #2) 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 11, 2024. Interest on borrowings against the line of credit is variable at the National Prime Rate plus 0.00% per annum. There was no outstanding balance under this line of credit as of September 30, 2022 or December 31, 2021. The proceeds from the debt refinancing were used to repay all bank debt outstanding at the time of closing and to provide some additional working capital. During the fourth quarter of 2020, we closed on a $1,500,000 note with GSB (Loan #4) that bears interest at a fixed rate of 3.50% per annum (with a 7-year term and amortization schedule). Proceeds of $624,167 were used to prepay a portion of the outstanding principal on our mortgage note (Loan #1), 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. During the first quarter of 2022, we closed on an additional $2,000,000 in mortgage debt, which bears interest at the fixed rate of 3.58% per annum. This was accomplished through an amendment of the original mortgage note (Loan #1) that increased the then outstanding principal balance from $4,233,957 to $6,233,957 bearing interest at the blended fixed rate of 3.53% per annum. This increased the balloon payment from $3,145,888 to $3,687,331 and extended the due date of the balloon payment from the first quarter of 2030 to the first quarter of 2032. In connection with these credit facilities, we incurred aggregate debt issuance costs of $70,170. The amortization of these debt issuance costs is being recorded as a component of interest expense, included in other expenses, net, and is being amortized over the underlying terms of the notes. These three 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 (DSC) ratio requirement of 1.35 for the year ended December 31, 2021. By negotiation with the bank in connection with the mortgage debt financing during the first quarter of 2022, the required minimum DSC ratio was reduced to 1.0 for the year ending December 31, 2022. During the second quarter of 2020, we received a loan from the Maine Technology Institute (MTI) (Loan #3) in the aggregate principal amount of $500,000. The first 2.25 years 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 if not repaid before then. On June 30, 2021, we executed definitive agreements covering a second loan from the MTI (Loan #5) in the aggregate principal amount of $400,000, proceeds from which were received in July 2021. The first two years 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 5.5 years of the loan, beginning during the third quarter of 2023 and continuing through the fourth quarter of 2028 if not repaid before then. These credit facilities are unsecured and subordinated to our indebtedness to GSB. Failure to make timely payments of principal and interest, or otherwise to comply with the terms of the agreements with the MTI, would entitle the 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 three-month periods ended September 30, 2022 and 2021 are reflected in the following table by period and by loan:
|  | During the Three-Month Period Ended September 30, 2022 |  |  | During the Three-Month Period Ended September 30, 2021 |
|  | Proceeds from Debt Issuance |  |  | Debt Principal Repayments |  |  | Proceeds from Debt Issuance |  |  | Debt Principal Repayments |
Loan #1 |  | $ | — |  |  | $ | (53,634 | ) |  | $ | — |  |  | $ | (28,840 | )
Loan #2 |  |  | — |  |  |  | (119,658 | ) |  |  | — |  |  |  | (115,456 | )
Loan #3 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Loan #4 |  |  | — |  |  |  | (49,810 | ) |  |  | — |  |  |  | (48,061 | )
Loan #5 |  |  | — |  |  |  | — |  |  |  | 400,000 |  |  |  | — |
Total |  | $ | — |  |  | $ | (223,102 | ) |  | $ | 400,000 |  |  | $ | (192,357 | )
Debt proceeds received and principal repayments made during the nine-month periods ended September 30, 2022 and 2021 are reflected in the following table by period and by loan:
|  | During the Nine-Month Period Ended September 30, 2022 |  |  | During the Nine-Month Period Ended September 30, 2021 |
|  | Proceeds from Debt Issuance |  |  | Debt Principal Repayments |  |  | Proceeds from Debt Issuance |  |  | Debt Principal Repayments |
Loan #1 |  | $ | 2,000,000 |  |  | $ | (144,293 | ) |  | $ | — |  |  | $ | (86,342 | )
Loan #2 |  |  | — |  |  |  | (356,278 | ) |  |  | — |  |  |  | (343,868 | )
Loan #3 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Loan #4 |  |  | — |  |  |  | (148,347 | ) |  |  | — |  |  |  | (143,156 | )
Loan #5 |  |  | — |  |  |  | — |  |  |  | 400,000 |  |  |  | — |
Total |  | $ | 2,000,000 |  |  | $ | (648,918 | ) |  | $ | 400,000 |  |  | $ | (573,366 | )
Principal payments (net of debt issuance costs) due under bank loans outstanding as of September 30, 2022 (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, |  |  |  |  |  |  |
|  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2025 |  |  | 2026 |  |  | Thereafter |  |  | Total |
Loan #1 |  | $ | 54,740 |  |  | $ | 223,349 |  |  | $ | 230,891 |  |  | $ | 239,876 |  |  | $ | 248,604 |  |  | $ | 5,122,386 |  |  | $ | 6,119,846 |
Loan #2 |  |  | 120,956 |  |  |  | 494,433 |  |  |  | 512,102 |  |  |  | 530,738 |  |  |  | 549,881 |  |  |  | 140,486 |  |  |  | 2,348,596 |
Loan #3 |  |  | 22,160 |  |  |  | 91,446 |  |  |  | 96,104 |  |  |  | 101,001 |  |  |  | 106,146 |  |  |  | 83,143 |  |  |  | 500,000 |
Loan #4 |  |  | 50,366 |  |  |  | 205,878 |  |  |  | 213,217 |  |  |  | 220,994 |  |  |  | 228,965 |  |  |  | 240,460 |  |  |  | 1,159,880 |
Loan #5 |  |  | — |  |  |  | 32,017 |  |  |  | 66,470 |  |  |  | 69,856 |  |  |  | 73,415 |  |  |  | 158,242 |  |  |  | 400,000 |
Subtotal |  |  | 248,222 |  |  |  | 1,047,123 |  |  |  | 1,118,784 |  |  |  | 1,162,465 |  |  |  | 1,207,011 |  |  |  | 5,744,717 |  |  |  | 10,528,322 |
Debt issuance costs |  |  | (1,919 | ) |  |  | (7,676 | ) |  |  | (7,267 | ) |  |  | (7,168 | ) |  |  | (7,168 | ) |  |  | (20,281 | ) |  |  | (51,479 | )
Total |  | $ | 246,303 |  |  | $ | 1,039,447 |  |  | $ | 1,111,517 |  |  | $ | 1,155,297 |  |  | $ | 1,199,843 |  |  | $ | 5,724,436 |  |  | $ | 10,476,843 |

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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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 + Details
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