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LINE OF CREDIT
 12 Months Ended
Oct. 31, 2021
Debt Disclosure [Abstract]  
LINE OF CREDIT

NOTE 6 - LINE OF CREDIT:

 

On April 25, 2017 the Company and OPTCO (together with the Company, collectively referred to herein as the “Borrowers”) entered into an Amended and Restated Loan and Security Agreement (the “A&R Loan Agreement”) and Amended and Restated Loan Facility (the “A&R Loan Facility”) with Sterling National Bank (“Sterling”), which consolidated (i) the financing agreement between the Company and Sterling, dated February 17, 2009, as modified, (the “Company Financing Agreement”) and (ii) the financing agreement between Company, as guarantor, OPTCO and Sterling, dated March 10, 2015 (the “OPTCO Financing Agreement”), amongst other things.

 

On March 13, 2020, the Company reached an agreement for a new loan modification agreement and credit facility with Sterling. The terms of the new agreement, among other things: (i) provides for a new maturity date of March 31, 2022 and (ii) decreases the interest rate per annum to LIBOR plus 1.75% (with such interest rate not to be lower than 3.50%). All other terms of the A&R Loan Agreement and A&R Loan Facility remain substantially the same.

 

 

COFFEE HOLDING CO., INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2021 AND 2020

 

NOTE 6 - LINE OF CREDIT (cont’d):

 

Each of the A&R Loan Facility and A&R Loan Agreement contains covenants, subject to certain exceptions, that place annual restrictions on the Borrowers’ operations, including covenants relating to debt restrictions, capital expenditures, indebtedness, minimum deposit restrictions, tangible net worth, net profit, leverage, employee loan restrictions, dividend and repurchase restrictions (common stock and preferred stock), and restrictions on intercompany transactions. The Company was in compliance with all covenants as of October 31, 2021 and October 31, 2020. The outstanding balance on the Company’s lines of credit were $3,800,850 and $3,796,822 as of October 31, 2021 and October 31, 2020, respectively. Interest expense recorded for the years ended October 31, 2021 and 2020 were $85,359 and $184,045, respectively.

 

On March 17, 2022, the Company reached an agreement for a new loan modification agreement and credit facility which extended the maturity date to June 29, 2022. The facility has been approved for a two year extension and the related documents are currently being prepared. All other terms of the A&R Loan Agreement and A&R Loan Facility remain the same.

 

On June 28, 2022, the Company reached an agreement for a new loan modification agreement and credit facility with Webster Bank. The terms of the new agreement, among other things: (i) provided for a new maturity date of June 30, 2024, and (ii) changed the interest rate per annum to SOFR plus 1.75% (with such interest rate not to be lower than 3.50%). All other terms of the A&R Loan Agreement and A&R Loan Facility remain the same.

 

The Company is classifying the line of credit as non current. The financing agreement was refinanced on June 28, 2022, post balance sheet date, but prior to re-issuance date of March 16, 2023. The maturity date was extended to June 30, 2024. As disclosed in Note 12, the Company was not in compliance with certain affirmative and negative covenants stated in the loan agreement including a requirement to furnish the lender with audited financial statements for the year ended October 31, 2022 within 120 days of that reporting date. The lender waived the violations and extended the due for delivery of the October 31, 2022 financial statements date to April 15, 2023 in connection with the ninth amendment and restatement to the loan agreement which is also disclosed in Note 12.