Note 12 - Debt

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE

1

2

—

DEBT

Loan and Security Agreement

On

May 30, 2018,

the Company and Wells Fargo Bank, N.A. (“Wells Fargo”) entered into a Loan and Security Agreement (the “Original Revolving Line of Credit”) in the original principal amount of

$25

million. The Original Revolving Line of Credit terminates on

May 30, 2021.

As of

December 31, 2018,

there were

no

borrowings under the Original Revolving Line of Credit.

Covenants

The Original Revolving Line of Credit contained financial and other covenants as well as the maintenance of a leverage ratio

not

to exceed

2.5

to

1.0

and a Trailing Twelve Month ("TTM") adjusted EBITDA of

not

less than

$10

million. A violation of any of the covenants could result in a default under the Original Revolving Line of Credit that would permit the lenders to restrict the Company’s ability to further access the revolving line of credit for loans and letters of credit and require the immediate repayment of any outstanding loans under the Loan and Security Agreement.

During the

third

quarter of

2018,

the Company was notified that it was in violation of certain financial covenants in the Original Revolving Line of Credit. Upon receipt of this notice, the Company entered into discussions with Wells Fargo to amend and revise certain terms of the Original Revolving Line of Credit. Following the end of the Company's 

third

quarter, on or about

November 2, 2018, 

the Company entered into a First Amendment and Waiver to the Loan and Security Agreement with Wells Fargo (the “First Amended Revolving Line of Credit”).

The First Amended Revolving Line of Credit provided for an original principal amount of

$15

million, with the ability to request an additional

$10

million and a waiver of any existing defaults under the Original Revolving Line of Credit as long as the Company is in compliance with the terms of the Revised Revolving Line of Credit.

Similar to the Original Revolving Line of Credit, the First Amended Revolving Line of Credit contained revised financial and other covenants as well as the maintenance of a leverage ratio

not

to exceed

2.0

to

1.0

and a graduated scale of TTM adjusted EBITDA of

not

less than

$1

million as of the last day of the

2018

third

fiscal quarter;

$2.5

million as of the last day of the

2018

fourth

fiscal quarter;

$4

million as of the last day of the

2019

first

and

second

fiscal quarters;

$6.5

million as of the last day of the

2019

third

fiscal quarter; and

$10

million as of the last day of each fiscal quarter.

Subsequent to

December 2018,

the Company again determined that it was in violation of certain financial covenants in the First Amended Revolving Line of Credit. The Company again entered into discussions with Wells Fargo to amend and revise certain terms of the First Amended Revolving Line of Credit. On or about,

March 11, 2019 

the Company entered into a Second Amendment and Waiver to the Loan and Security Agreement with Wells Fargo (the “Second Amended Revolving Line of Credit”). The Second Amended Revolving Line of Credit requires the Company to maintain a minimum cash balance of

$15

million at Wells Fargo, but removes all other covenants so long as

no

money is drawn on the line of credit. The Company

may

draw down on the line of credit at the time it reaches and maintains TTM adjusted EBITDA of

not

less than

$10

million, and a leverage ratio

not

to exceed

2.5

to

1.0.

As of the date of this filing, there were

no

borrowings under either the Second Amended Revolving Line of Credit, First Amended Revolving Line of Credit, or the Original Revolving Line of Credit, and the Company is in compliance with all financial covenants of the Revised Revolving Line of Credit.