BANK BORROWINGS

9 Months Ended

Sep. 30, 2022

Bank Borrowings

Bank Borrowings

Note 7–Bank Borrowings

The Company has a $50,000 credit facility collateralized by its account receivables that expires March 31, 2025. This facility can be increased, at the Company’s option, to $80,000 for permitted acquisitions or other uses authorized by

the lender on substantially the same terms. Amounts outstanding under this facility bear interest at the one-month LIBOR, plus a spread based on our funded debt ratio, or in the absence of LIBOR, the prime rate (6.25% at September 30, 2022). The credit facility includes various customary financial ratios and operating covenants, including minimum net worth and maximum funded debt ratio requirements, and default acceleration provisions. The credit facility does not include restrictions on future dividend payments. Funded debt ratio is the ratio of average outstanding advances under the credit facility for a given quarter to consolidated trailing twelve months Adjusted Earnings Before Interest Expense, Taxes, Depreciation, Amortization, and Special Charges (“Adjusted EBITDA”). The maximum allowable funded debt ratio under the agreement is 2.0 to 1.0. Decreases in the Company’s consolidated trailing twelve months Adjusted EBITDA could limit its potential borrowing capacity under the credit facility. As of September 30, 2022, the Company was in compliance with all financial covenants contained in the agreement governing the credit facility.

During the nine months ended September 30, 2022, the Company borrowed $36,463 under the credit facility, which was fully repaid prior to September 30, 2022. The Company had no outstanding borrowings under the credit facility as of September 30, 2022 or 2021, and accordingly, the entire $50,000 credit facility was available for borrowings on such date.