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DEBT

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

10. DEBT

On March 24, 2016, the Company entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with BankUnited, N.A. (“BankUnited”) as a lender and the sole arranger, administrative agent and collateral agent and Citizens Bank N.A. (the “BankUnited Facility”). The BankUnited Facility provided for a revolving credit loan commitment of $30 million (the “Revolving Loan”) and a $10 million term loan (“Term Loan”). The Revolving Loan bears interest at a rate based upon a pricing grid, as defined in the agreement.

On August 24, 2020, the Company entered into a Sixth Amendment and Waiver (“Sixth Amendment”) to the Credit Agreement with BankUnited. In connection with the Sixth Amendment, we also amended the Amended and Restated Revolving Credit Note, dated as of March 24, 2016, which represents an aggregate principal revolving loan commitment amount of $30 million (“Revolving Note”) and the Amended and Restated Term Note, dated as of March 24, 2016, with an original principal amount of $10 million (“Term Note”).

Under the Sixth Amendment, and the related amendments to the Revolving Note and Term Note, an aggregate of $6 million of the outstanding balance under the Revolving Note was converted into and added to the outstanding balance on the Term Note. The availability under the Revolving Note was permanently reduced by $6 million, to $24 million, and the outstanding principal amount on the Term Note was increased to approximately $7,933,000.

Additionally, under the Sixth Amendment, the parties amended the Credit Agreement by (i) extending the maturity date of the Revolving Note and Term Note to May 2, 2022, and making conforming changes to the payment schedule on the Term Note, (ii) amending the fixed charge coverage ratio covenant by requiring the ratio to be quarterly for September 30, 2020 and December 31, 2020 and then determined on a trailing 12 month basis beginning on March 31, 2021, (iii) waiving the leverage covenant noncompliance for each quarter ended during the period from March 31, 2018 through December 31, 2019. The leverage covenant will not be tested for the four quarters from March 31, 2020 through December 31, 2020. Then, beginning with the quarter ending March 31, 2021, the funded debt to EBITDA ratio shall be 4.0:1.0, tested on a trailing four quarter basis, (iv) reducing the minimum quarterly EBITDA covenant from $2 million to $1 million beginning on September 30, 2020, (v) maintaining a minimum net income, after taxes, of no less than $1.00, and (vi) replacing the interest pricing grid for the Revolving Note with an interest rate for Eurodollar loans of LIBOR plus 3.25% with a floor of 50 basis points or an interest rate for base rate loans equal to BankUnited’s prime rate plus 0.25%. The minimum liquidity covenant requires the Company to maintain at all times a minimum amount of $3 million in either unrestricted cash or revolving credit availability or any combination thereof remains in effect. As of September 30, 2020, the Company is in compliance with all of its covenants and has $3.9 million in excess of the minimum liquidity.

As of September 30, 2020, the Company had $20.7 million outstanding under the Revolving Loan bearing interest at 4%. As of September 30, 2020, the Revolving Loan had a maturity date of May 2, 2022.

The Term Loan, as amended, had an aggregate principal amount of $7,933,000, payable in monthly installments, as defined in the agreement, as of September 30, 2020, with a maturity date of May 2, 2022.

The maturities of long-term debt (excluding unamortized debt issuance costs) are as follows:


Twelve months ending September 30,
2021			$	5,377,559
2022				7,641,681
2023				132,220
2024				37,566
Total			$	13,189,026

The BankUnited Facility is secured by all of the Company’s assets.

The Company has cumulatively paid approximately $596,000 of total debt issuance costs in connection with the BankUnited Facility, of which approximately $98,000 is included in other assets at September 30, 2020.

On April 10, 2020, the Company entered into a loan with BNB Bank as the lender (“Lender”) in an aggregate principal amount of $4,795,000 (“PPP Loan”) pursuant to the Paycheck Protection Program, part of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The PPP Loan is evidenced by a promissory note (“Note”). The PPP Loan has an initial term of two years, and is unsecured and guaranteed by the Small Business Administration (“SBA”). Subject to the terms of the Note, the PPP Loan bears interest at a fixed rate of one percent (1%) per annum, with interest deferred until the Small Business Administration determines whether the PPP Loan will be forgiven. The amount of the PPP Loan which may be forgiven is equal to the sum of payroll costs, covered rent and mortgage obligations, and covered utility payments incurred by the Company during the 24-week period beginning on April 10, 2020, calculated in accordance with the terms of the CARES Act, as modified by the Paycheck Protection Flexibility Act. On October 16, 2020, the Company applied to the Lender for full forgiveness of the PPP Loan. On November 2, the Company was notified that the Lender approved the application and submitted it to the SBA for final approval in accordance with the applicable provisions of the CARES Act. We cannot assure you that the PPP Loan will be forgiven in full, or at all.

In addition to the Term Loan and PPP Loan, included in long-term debt are financing leases of $363,412 including a current portion of $272,281.