Note 9 - Debt

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Debt Disclosure [Text Block]

9. DEBT

The Company’s carrying value of debt, net of debt issuance costs, at December 31, 2023 and 2022 consisted of the following (in thousands):

	December 31,
	2023			2022
Secured term note and credit facility, net of debt issuance costs	$	8,604		$	8,650
Secured promissory note - related party		—			2,435
Insurance and other notes payable		825			848
Total		9,429			11,933
Less: amounts due within one year		(1,682	)		(3,283	)
Total long-term debt, net of debt issuance costs	$	7,747		$	8,650

Revolving Credit Facility

On June 9, 2023, the Company, along with its subsidiaries, Stabilis LNG Eagle Ford LLC, Stabilis GDS, Inc. and Stabilis LNG Port Allen, LLC (collectively, the “Borrowers”) entered into a three-year loan agreement (the “Revolving Credit Facility”) with Cadence Bank. The Revolving Credit Facility provides for a maximum aggregate amount of $10.0 million, subject to a borrowing base of 80% of eligible accounts receivable. The Company may request an increase in the maximum aggregate amount under the Revolving Credit Facility by up to $5.0 million, subject to the approval of Cadence Bank. All borrowings under the Revolving Credit Facility are secured by the Company’s accounts receivable and deposit accounts. Borrowings under the Revolving Credit Facility incur interest at the Prime Rate published by the Wall Street Journal. Any unused portion is subject to a quarterly unused commitment fee of 0.5% per annum. As of  December 31, 2023, no amounts have been drawn under the Revolving Credit Facility. The Revolving Credit Facility matures on June 9, 2026. Debt issuance cost of $0.1 million were incurred and are reflected as debt issuance costs paid on the Consolidated Statements of Cashflows. Amortization of debt issuance costs is in interest expense on the Consolidated Statements of Operations. 

The Revolving Credit Facility contains various restrictions and covenants. Among other requirements, the Borrowers must maintain a consolidated net worth of at least $50 million as of December 31, 2023, increasing by 50% of the Borrowers’ net income as of the end of each year ended December 31, and must maintain a minimum Fixed Charge Coverage Ratio of 1.2 to 1.0 on a consolidated basis, as defined in the Revolving Credit Facility, as of the last day of each fiscal quarter, on a trailing twelve (12) months basis. The Revolving Credit Facility also contains customary events of default. If an event of default under the Revolving Credit Facility occurs and is continuing, then Cadence Bank may declare any outstanding obligations under the Loan Agreement to be immediately due and payable. In addition, if any of the Borrowers become the subject of voluntary or involuntary proceedings under any bankruptcy, insolvency or similar law, then any outstanding obligations under the Loan Agreement will automatically become immediately due and payable. As of December 31, 2023, the Company was in compliance with all its covenants related to the Revolving Credit Facility.

Secured Term Note

On April 8, 2021, the Company entered into a loan agreement (the “Loan Agreement”) with AmeriState Bank (“Lender”), as lender, pursuant to the United States Department of Agriculture, Business & Industry Loan Program, to provide for an advancing loan facility in the aggregate principal amount of up to $10.0 million (the “AmeriState Loan”). As of December 31, 2023 and 2022, the amount drawn and outstanding totaled $9.0 million. The AmeriState Loan, which is in the form of a term loan facility, matures on April 8, 2031 and bears interest at 5.75% per annum through April 8, 2026, and the U.S. prime lending rate plus 2.5% per annum thereafter. The AmeriState Loan provides that proceeds from borrowings may be used for working capital purposes at the Company’s liquefaction plant in George West, Texas and related fees and costs associated with the AmeriState Loan. Upon an Event of Default (as defined in the Loan Agreement), the Lender may (i) terminate its commitment, (ii) declare the outstanding principal amount of the Advancing Notes (as defined in the Loan Agreement) due and payable, or (iii) exercise all rights and remedies available to Lender under the Loan Agreement.

On April 8, 2021, Mile High LNG LLC, Stabilis GDS, Inc., Stabilis LNG Eagle Ford LLC and Stabilis Energy Services, LLC, each a wholly owned subsidiary of the Company (collectively, “Debtor”), entered into a Security Agreement and Assignment (the “Security Agreement”) in favor of the Lender. The Security Agreement grants to Lender a first priority security interest in the collateral identified therein, which includes specific equipment owned by the Company.  The Loan Agreement requires the Company to meet certain financial covenants which include a debt-to-net-worth ratio of not more than 9.1 to 1.0 and a debt service coverage ratio of not less than 1.2 to 1.0. At December 31, 2023, the Company was in compliance with all of its debt covenants. Monthly payments of interest only extend through April 2024.  Monthly payments based upon a seven-year amortization begin May 2024 in the amount of $0.1 million of principal per month plus accrued interest.

Secured Promissory Note - Related Party

On August 16, 2019, the Company issued a Secured Promissory Note to MG Finance Co., Ltd., a related party, in the principal amount of $5.0 million, at an interest rate per annum of 6.0% until December 10, 2020, and 12.0% thereafter, maturing in December 2022. The debt was secured by certain equipment of the Company. On September 20, 2021, the Company amended its secured promissory note with MG Finance Co., Ltd, to defer scheduled debt and interest payments from September through December 2021 for a period of one year, with such payments to be included with the scheduled payments from September through December 2022. The Company again amended its secured promissory note with MG Finance Co., Ltd, on March 9, 2022 to defer scheduled debt and interest payments beginning April 2022 and lower the interest rate from 12.0% to 6.0%. Repayments under the amendment resumed in October 2022 and were in equal monthly installments through December 2023. The loan was paid in full as of  December 31, 2023.

Insurance Notes Payable

The Company finances its annual commercial insurance premiums for its business and operations. For the 2023-2024 policies, the amount financed was $1.1 million. The outstanding principal balance on the premium finance note was $0.8 million at December 31, 2023. The renewal occurs each  September and covers a period of up to one year. The Company makes equal monthly payments of principal and interest over the term of the note. The interest rate for the insurance financing on the 2023-2024 policy is 7.95%. At December 31, 2022, the outstanding balance was $0.8 million, related to the 2022-2023 policy with an interest rate of 6.31%.

Debt Maturities and Interest Expense

We had total indebtedness, net of debt issuance costs, on our Consolidated Balance Sheet of $9.0 million as of December 31, 2023. Expected maturities, excluding debt issuance costs of $0.3 million at December 31, 2023 are as follows (in thousands).

Year Ended December 31,
2024	$	857
2025		1,285
2026		1,285
2027		1,285
2028		1,285
Thereafter		3,001
Total long-term debt, including current maturities	$	8,998

During the years ended December 31, 2023 and 2022, the Company recorded interest expense related to the above indebtedness and related to leases (see Note 10 below) as follows (in thousands):

	December 31,
	2023		2022
Secured term note	$	345	$	551
Secured credit facility		49		—
Secured promissory note - related party		78		179
Insurance and other notes payable		32		31
Interest from leases		5		9
Total interest expense	$	509	$	770

During the years ended December 31, 2023 and 2022, the Company capitalized interest of $0.3 million and $0.0 million respectively.