Borrowings

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Borrowings

BORROWINGS

Line of Credit

On March 29, 2019, we entered into a Credit Agreement with JPMorgan Chase Bank, N.A. (“Chase Bank”) that provides for a $40.0 million revolving line of credit. The term of the Credit Agreement expires on March 29, 2022 and is secured by substantially all of our assets.

The Credit Agreement contains customary covenants for financings of this type, including, among other terms and conditions, revolving availability subject to a calculated borrowing base, minimum cash reserves and minimum fixed charge cover ratio covenants, as well as limitations and conditions on our ability to (i) create, incur, assume or be liable for indebtedness; (ii) dispose of assets outside the ordinary course of business; (iii) acquire, merge or consolidate with or into another person or entity; (iv) create, incur or allow any lien on any of our property; (v) make investments; or (vi) pay dividends or make distributions, in each case subject to certain exceptions. In addition, the Credit Agreement provides for certain events of default such as nonpayment of principal and interest when due thereunder, breaches of representations and warranties, noncompliance with covenants, acts of insolvency and default on indebtedness held by third parties (subject to certain limitations and cure periods), as well as a subjective acceleration clause.

The interest rate applicable to each advance under the revolving line of credit is based on either Chase Bank's floating prime rate or adjusted LIBOR, plus an applicable margin. As of June 30, 2019, our borrowing rate for line of credit advances was 4.44%.

As of June 30, 2019, we had $20.6 million of outstanding borrowings under the line of credit which we used to pay off a term loan. As of June 30, 2019, we were in compliance with the financial covenants of the Credit Agreement and $14.1 million was available for borrowing under the line of credit. Any outstanding balance is due and payable on March 29, 2022.