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Note 5 - Bank Financing Arrangements

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Bank Financing Arrangements

NOTE 5 — Bank Financing Arrangements

The Company initially entered into a Business Financing Agreement with Western Alliance Bank (the “Bank”), an Arizona corporation, on February 27, 2014, and this agreement has been amended and extended through the years.

Seventh Financing Agreement

On January 8, 2020, the Company entered into the Seventh Amended and Restated Business Financing Agreement with the Bank which extends the maturity date of the Company’s revolving line of credit to January 31, 2022.

Eighth Financing Agreement

On August 28, 2020, the Company entered into the Eighth Amended and Restated Business Financing Agreement with the Bank. The Bank consented to the issuance of subordinated debt in the amount less than $2,000,000, at the annual interest rate less than 10% and maturing no sooner than 3 years.

Amended and Restated Business Financing Agreement

On January 29, 2021, the Company entered into an Amended and Restated Business Financing Agreement (the “Financing Agreement”) with the Bank. The agreement increased the Domestic Line of Credit to $3.0 million, including a $2.0 million revolving facility and $1.0 million nonformula loan. The $1.0 million nonformula loan was enrolled in the CalCap Collateral Support Program and advanced on February 16, 2021. The Company will make a principal reduction payment of $125,000, plus all accrued but unpaid interest on the 30th day of each of April, July, October and January. The Financing Agreement also extended the maturity date of both the Domestic and EXIM Line of Credit to January 31, 2023.

Amounts outstanding under the CalCap loan at March 31, 2021 are as follows:

		March 31, 2021
Long-term portion of CalCap loan		$	500,000
Current portion of CalCap loan			500,000
CalCap loan		$	1,000,000

During the three months ended March 31, 2020, total repayment of the term loan was $125,000. Total amount borrowed under the domestic and international lines was $3,980,000 and the total repayment was $3,452,957. Amounts outstanding under the term loan and bank credit facilities at March 31, 2020 are $208,333 and $1,939,492, respectively.

Interest expense on the CalCap loan for three months ended March 31, 2021 was $4,306. Accrued interest payable related to the amounts outstanding under the CalCap loan at March 31, 2021 was $2,917. Interest expense on the term loan for the three months ended March 31, 2020 was $4,027. Interest expense on the amounts drawn under the Company’s bank credit lines during the three months ended March 31, 2020 was $15,601. Accrued interest payable related to the amounts outstanding under the term loan and bank credit facilities as of March 31, 2020 was $14,560.

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- References

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- Definition

Tabular disclosure of short-term or long-term contractual arrangements with lenders, including letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.19(b),22(b))
-URI http://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

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