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REVOLVING LOAN, SHORT TERM NOTE AND LONG-TERM DEBT
 9 Months Ended
Sep. 30, 2022
Debt Disclosure [Abstract]  
REVOLVING LOAN, SHORT TERM NOTE AND LONG-TERM DEBT

NOTE 15 – REVOLVING LOAN, SHORT TERM NOTE AND LONG-TERM DEBT

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September 30, 

    

December 31, 

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2022

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2021

PPP Promissory Note - In April 2020, the Company applied for and received $773,810 in SBA loans through the paycheck protection program. During the period ended March 31, 2022, the Company made $90,198 in principal payments and during the year ended December 31, 2021 the SBA forgave $392,200 of the PPP loan. In April 2022, the SBA forgave the remaining balance of $126,131 and issued a refund for $48,305 of principal payments made during the three months ended March 31, 2022.

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$

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$

216,329

2021 Revolving Loan - On June 17, 2021, the Company amended its revolving loan agreement (“amended revolver”) and increased the maximum balance to $9,000,000. The amended revolver matures on December 31, 2023 and has an annual interest rate equal to the prime rate less 0.25%. The revolver is secured by the certificate of deposit accounts held with the financial institution, and reported as restricted cash, in the amount of $5,257,382 and $5,240,752 as of September 30, 2022 and December 31, 2021, respectively. Debt covenants of this loan require the Company to maintain a minimum debt service coverage ratio of at least 1.5 to 1.

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9,000,000

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9,000,000

2021 Promissory Note - On June 17, 2021, the Company amended its loan agreement to reduce the principal amount with financial institution for 10 years, annual interest rate of 3.5% for the first 5 years, and then floating at Wall Street Journal rate from years 6 to 10, the loan is secured by the Company’s building and matures on June 30, 2031. The note is subject to a prepayment penalty.

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2,904,815

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2,962,782

2022 Short Term Note - On January 26, 2022, the Company amended its revolving loan and long-term debt agreements to obtain an additional note with a principal balance of $10,000,000 which matures on January 26, 2023. Interest shall be equal to the higher of 3.75% or the Wall Street Journal Prime Rate plus 0.50%. The loan is secured by the Company’s assets. In the event of a default, all outstanding amounts under the note will bear interest at a default rate equal to 5% over the note rate. Debt covenants of this loan require the Company to maintain a minimum debt service coverage ratio of at least 1.5 to 1 and will be measured quarterly. In November 2022, the maturity was extended to January 26, 2024; see Note 19 - Subsequent Events.

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6,666,667

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Total

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18,571,482

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12,179,111

Less: current portion

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15,746,092

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9,293,677

Total long-term debt

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$

2,825,390

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$

2,885,434

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Total interest expense for the above debt and revolver loan amounted to $254,480 and $105,577 for the three months ended, September 30, 2022 and 2021, respectively. Total interest expense for above debt and revolver loan amounted to $594,171 and $281,680 for the nine months ended September 30, 2022 and 2021, respectively. Amortization of loan origination expenses of $6,590 and $8,870 are included as part of interest expense for the three months ended September 30, 2022 and 2021, respectively. Amortization of loan origination expenses of $19,149 and $22,388 are included as part of interest expense for the nine months ended September 30, 2022 and 2021, respectively. The Company is in compliance with its debt covenants as of September 30, 2022 and December 31, 2021.

The following table provides future minimum payments of its long-term debt as of December 31:

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Years ending December 31,

    

Amount

Remainder of 2022

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$

1,269,381

2023

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14,496,804

2024

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82,748

2025

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86,013

2026

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89,115

Thereafter

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2,547,421

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$

18,571,482

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