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Note 3 - Long Term Debt Financing | 9 Months Ended
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Sep. 30, 2024
Notes to Financial Statements |
Long-Term Debt [Text Block] | Note 3. Long-Term Debt Financing On April 9, 2021 the Company along with certain of its domestic subsidiaries (collectively, the “Loan Parties”) entered into a five year $22,000,000 credit agreement (the “Credit Agreement”) with Fifth Third Bank, N.A. (“Fifth Third”). The Credit Agreement includes three loan facilities. The first loan facility is a $9,500,000 term loan (the “Term Loan”) which was used to refinance the domestic Gamma Knife debt and finance leases, and associated closing costs. The second loan facility of $5,500,000 is a delayed draw term loan (the “DDTL”) which was used to refinance the Company’s PBRT finance leases and associated closing costs, as well as to provide additional working capital. The third loan facility provides for a $7,000,000 revolving line of credit (the “Revolving Line”) available for future projects and general corporate purposes. The Company borrowed $4,500,000 on the Revolving Line as of September 30, 2024. The facilities have a five-year maturity and carry a floating interest of based on the Secured Overnight Financing Rate (“SOFR”) plus 3.0% and are secured by a lien on substantially all of the assets of the Loan Parties and guaranteed by ASHS. On January 25, 2024 (the “First Amendment Effective Date”), the Company and Fifth Third entered into a First Amendment to Credit Agreement (the “First Amendment”), which amended the Credit Agreement to add a new term loan in the aggregate principal amount of $2,700,000 (the “Supplemental Term Loan”). The proceeds of the Supplemental Term Loan were advanced in a single borrowing on January 25, 2024, and were used for capital expenditures related to the Company’s operations in Puebla, Mexico and other related transaction costs. The Supplemental Term Loan will mature on January 25, 2030 (the “Maturity Date”). Interest on the Supplemental Term Loan is payable monthly during the initial twelve month period following the First Amendment Effective Date. Following such twelve month period, the Company is required to make equal monthly payments of principal and interest to fully amortize the amount outstanding under the Supplemental Term Loan by the Maturity Date. The Supplemental Term Loan is secured by a lien on substantially all of the assets of the Company and certain of its domestic subsidiaries. The First Amendment also replaces the LIBOR-based rates in the Credit Agreement with SOFR-based rates. Pursuant to the First Amendment, advances under the Credit Agreement bear interest at a floating rate per annum equal to SOFR plus 3.00%, subject to a SOFR floor of 0.00%. The long-term debt on the condensed consolidated balance sheets related to the Term Loan and DDTL was $12,588,000 and $10,825,000 as of September 30, 2024 and December 31, 2023, respectively. The Company capitalized debt issuance costs of $97,000 as of September 30, 2024 related to issuance of the Supplemental Term Loan. The Credit Agreement contains customary covenants and representations, including without limitation, a minimum fixed charge coverage ratio of 1.25 and maximum funded debt to EBITDA ratio of 3.0 to 1.0 (tested on a trailing twelve-month basis at the end of each fiscal quarter), reporting obligations, limitations on dispositions, changes in ownership, mergers and acquisitions, indebtedness, encumbrances, distributions, investments, transactions with affiliates and capital expenditures. The Loan Parties are in compliance with the Credit Agreement covenants as of September 30, 2024. The loan entered into with United States International Development Finance Corporation (“DFC”) in connection with the acquisition of GKCE in June 2020 (the “DFC Loan”) was obtained through the Company’s wholly-owned subsidiary, HoldCo and is guaranteed by GKF. The DFC Loan is secured by a lien on GKCE’s assets. The first tranche of the DFC Loan was funded in June 2020. During the fourth quarter of 2023, the second tranche of the DFC loan was funded to finance the equipment upgrade in Ecuador. The amount outstanding under the first tranche of the DFC Loan is payable in 29 quarterly installments with a fixed interest rate of 3.67%. The amount outstanding under the second tranche of the DFC Loan is payable in 16 quarterly installments with a fixed interest rate of 7.49%. The long-term debt on the condensed consolidated balance sheets related to the DFC Loan was $1,970,000 and $2,464,000 as of September 30, 2024 and December 31, 2023, respectively. The Company capitalized debt issuance costs of $0 and $9,000 as of September 30, 2024 and December 31, 2023, respectively, related to maintenance and administrative fees on the DFC Loan. The DFC Loan contains customary covenants including without limitation, requirements that HoldCo maintain certain financial ratios related to liquidity and cash flow as well as depository requirements. On March 28, 2024 the HoldCo received a waiver and amendment from DFC for certain covenants as of December 31, 2023 and through December 31, 2024 and amended other covenants and definitions permanently. HoldCo was in compliance with all debt covenants pursuant to the DFC Loan as amended and waived at September 30, 2024. The accretion of debt issuance costs for the three and nine-month periods ended September 30, 2024 was $19,000 and $77,000 compared to $7,000 and $44,000 for the same periods in the prior year, respectively. As of September 30, 2024 and December 31, 2023, the unamortized deferred issuance costs on the consolidated balance sheet was $184,000 and $164,000, respectively. As of September 30, 2024, long-term debt on the condensed consolidated balance sheets was $14,375,000. The following are contractual maturities of long-term debt as of September 30, 2024, excluding deferred issuance costs of $184,000:
Year ending December 31, |  | Principal |
2024 (excluding the nine-months ended September 30, 2024) |  | $ | 727,000 |
2025 |  |  | 3,402,000 |
2026 |  |  | 8,272,000 |
2027 |  |  | 1,033,000 |
2028 |  |  | 540,000 |
Thereafter |  |  | 585,000 |
|  | $ | 14,559,000 |

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