Bank Revolving Line of Credit and Fixed Credit Facilities

6 Months Ended

Jun. 30, 2022

Line Of Credit Facility [Abstract]

Bank Revolving Line of Credit and Fixed Credit Facilities

11. Bank Revolving Line of Credit and Fixed Credit Facilities

The Company has one revolving (the “Revolving Line”) and three non-revolving credit facilities (“Fixed Line 1”, Fixed Line 2” and “Fixed Line 4”) with Bank of America. On June 30, 2022 and June 30, 2021, the interest rate on the Revolving Line was 2.11% and 3.60%, respectively. All outstanding principal on the Revolving Line is due on July 31, 2023. On June 30, 2022 and December 31, 2021, there was no outstanding balance on the Revolving Line.

Fixed Line #1 had a maximum advance of $1.0 million and does not allow for re-borrowings and is included in Notes Payable (see Note 12). On June 30, 2022 and 2021, the interest rate was 3.51% and 2.85%, respectively. Commencing the earlier of i) the date no remaining amount is available under the Fixed Line or, ii) August 31, 2018, the Company was obligated to pay the then outstanding principal balance in sixty equal monthly installments through maturity in August 2023. On June 30, 2022 and December 31, 2021, the outstanding balance on Fixed Line #1 was $0.2 million and $0.3 million, respectively.

Fixed Line #2 had a maximum advance of $1.0 million and does not allow for re-borrowings and is included in Notes Payable (see Note 12). Commencing the earlier of i) the date no remaining amount is available under the Fixed Line or, ii) August 31, 2020, the Company is obligated to pay the then outstanding principal balance in sixty equal monthly installments through maturity in September 2025. On June 30, 2022 and December 31, 2021, the outstanding balance on Fixed Line #2 was $0.6 million and $0.7 million, respectively.

Facility #4 is a term loan with a principal loan amount of $1.0 million and is included in Notes Payable (see Note 12). The loan is to be repaid over thirty-six equal monthly installments beginning April 13, 2020, through maturity on March 13, 2023. The interest rate on this loan is 3.49%. On June 30, 2022 and December 31, 2021, the outstanding balance on Facility #4 was $0.3 million and $0.4 million, respectively.

The Company secures its obligations under the Credit Agreement with substantially all assets of the Company. Obligations of the Company to certain other shareholders of the Company are subordinated to the Company’s obligations under the Credit Agreement and Fixed Line loans. The Company must maintain, on a combined basis certain financial covenants defined in the Credit Agreement.

Interest expense on the Revolving and Fixed Lines totaled $11,000 and $21,000 during the three and six months ended June 30, 2022, respectively. Interest expense on the Revolving and Fixed Lines totaled $42,000 and $0.1 million during the three and six months ended June 30, 2021, respectively.