Note 9 - Debt

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE 9. DEBT

We finance certain amounts owed for annual insurance premiums under financing agreements. As of March 31, 2022, amounts due under insurance premium financing agreements are due in monthly installments of principal and interest through May 2022, at interest rates of 3.7% to 4.0% per year.

We borrow under a factoring agreement with a lender, which provides a $7.0 million credit facility. We may only borrow to the extent we have qualifying accounts receivable as defined in the agreement. The facility had an initial two-year term and automatically renews for successive annual periods, unless proper termination notice is given. The facility term has automatically extended to October 2022. We paid a $0.2 million facility fee upon inception of the agreement which amortized to interest expense on a straight-line basis over the two years ending in October 2021. We incur recurring fees under the agreement, including a funding fee of 0.5% above the prime rate, in no event to be less than 5.5%, on any advances and a service fee on average net funds borrowed. The lender has the right to demand repayment of the advances at any time. The lender has a security interest in personal property assets.

Additional information related to our factoring obligation follows.

	Three Months Ended March 31,
	2022			2021
Average borrowings outstanding (in thousands)	$	2,822		$	879
Amortization of debt issuance costs (in thousands)	$	23		$	23
Fees paid, as a percentage of average oustanding borrowings		1.2	%		1.5	%
Interest paid, as a percentage of average outstanding borrowings		1.5	%		1.8	%

Long-term debt consists of the following (in thousands).

	March, 31		December 31,
	2022		2021
Mortgage promissory note - Originally dated July 2020 and modified in December 2021. As modified, interest accrues at an annual rate which is the greater of 7.0% above the lender's prime rate and 10.3% (10.3% at March 31, 2022) payable in monthly installments through December 2023. Net of $25 debt issuance costs at March 31, 2022. Face amount $2.5 million. Interest accrued at the effective discount rate 11.5%. Secured by certain real property in Wynn, Arkansas.	$	2,190	$	2,469
Equipment note - Dated May 2021. Original principal $46. Due in monthly installments through June 2025. Interest accrues at the effective discount rate of 3.6% per year.		31		33
Equipment note - Dated December 2019. Original principal $40. Due in monthly installments through December 2024. Interest accrues at the effective discount rate of 9.3% per year.		24		26
Equipment notes - Initially recorded in November 2018, in an acquisition, at the present value of future payments using a discount rate of 4.8% per year. Due in monthly installments through August 2022.		7		11
Total long term debt, net	$	2,252	$	2,539

Future principal maturities of long-term debt outstanding as of March 31, 2022, follow (in thousands).

2022 (nine months ended December 31, 2022)	$	920
2023		1,332
2024		20
2025		5
Principal maturities		2,277
Debt issuance costs		(25	)
Total long term debt, net	$	2,252