XML 22 R12.htm IDEA: XBRL DOCUMENT v3.25.3
Debt
 9 Months Ended
Sep. 30, 2025
Debt Disclosure [Abstract]  
Debt

Note 3 - Debt

 

On September 30, 2021 (the “Closing Date”), the Company entered into a loan and security agreement (the “Agreement”) with Line Financial (the “Lender”), which provides for a senior secured financing consisting of a revolving credit facility (the “Revolving Credit Facility) in an aggregate principal amount of up to $7 million, as amended (the “Maximum Revolver Amount”), subject to borrowing base provisions, and term loan facility (the “Term Loan Facility”) in an aggregate principal amount of $731,250 (“Term Loan Amount” and, together with the Revolving Credit Facility, the “Senior Facilities”). The Senior Facilities are secured by substantially all assets of the Company. The Company has remained in compliance with all material covenants since inception.

 

Borrowings under the Revolving Credit Facility bear interest at the prime rate + 7.82% (15.07% as of September 30, 2025), payable monthly in arrears. The Term Loan Facility bears interest at the prime rate + 1.45% (8.7% as of September 30, 2025) and is repaid in 48 monthly installments of approximately $15,000, beginning November 1, 2021. The Company also pays collateral monitoring fees of 4.62% of the eligible accounts receivable, inventory, and equipment supporting both facilities.

 

Originally maturing September 30, 2023, the Senior Facilities were extended to April 30, 2027 pursuant to a Fifth Amendment executed on September 30, 2025, which also increased the revolving commitment from $6.0 million to $7.0 million and added a 0.75% renewal fee, payable in two equal installments in October 2025 and September 2026. A $12,500 commitment fee was also incurred. All other material terms, including borrowing base, collateral, and covenants, remained unchanged.

 

The facility automatically renews for successive one-year periods unless either party provides written notice of termination not less than 90 days prior to the end of the then-current term. The Company may prepay the Term Loan Facility (together with accrued interest and any applicable prepayment fee) in whole, but not in part, upon at least 60 days’ prior written notice.

 

The Agreement requires the Company to maintain minimum tangible net worth of $4.0 million, subject to adjustment by the Lender. The Company was in compliance with this covenant as of September 30, 2025 and December 31, 2024. The Agreement also limits additional indebtedness, liens, dividends, mergers, and annual capital expenditures exceeding $1.0 million.

 

At September 30, 2025 and December 31, 2024, the term loan balance was approximately $0.6 million (net of $0 and $17,000 deferred costs, respectively), and the revolving balance was $4.6 million and $6.6 million, respectively. The December 2024 balance temporarily exceeded the then limit due to holiday-related timing and was reduced below the cap on January 3, 2025. $2.4 million remained available for borrowing under the Revolving Credit Facility as of September 30, 2025.

 

The Company also has a subordinated note payable to John H. Schwan, Director and former Chairman of the Board, bearing 6% interest. The balance was $1.3 million at December 31, 2023; $1.0 million was repaid in January 2024, with $0.3 million remaining due at a future date to be determined.