Bank Revolving Line of Credit and Fixed Credit Facilities

3 Months Ended

Mar. 31, 2023

Line of Credit Facility [Abstract]

Bank Revolving Line of Credit and Fixed Credit Facilities

Bank Revolving Line of Credit and Fixed Credit Facilities

The Company has one revolving credit facility (the “Revolving Line”) and three non-revolving credit facilities (“Fixed Line 1”, Fixed Line 2” and “Fixed Line 4”) with Bank of America, N.A. On March 31, 2023 and March 31, 2022, the interest rate on the Revolving Line was 9.00% and 3.25%, respectively. All outstanding principal on the Revolving Line is due on September 30, 2024. On March 31, 2023 and December 31, 2022, there was no outstanding balance on the Revolving Line.

On November 11, 2022, the Company and certain of its subsidiaries, as guarantors, entered into an Amended and Restated Credit Agreement with Bank of America, N.A. (the "Amended and Restated Agreement") as well as an Amended and Restated Pledge and Security Agreement. The Amended and Restated Agreement increased the maximum principal amount of the Revolving Line of credit to $50 million, is secured by all the assets of the Company and the subsidiary guarantors and has a maturity date of September 30, 2024. Under the Amended and Restated Agreement, the Company is required to comply with certain covenants, including covenant on indebtedness, investments, liens and restricted payments, as well as maintain certain financial covenants, including a fixed charge coverage ratio and leverage ratio of debt to EBITDA (as defined in the Amended and Restated Agreement).

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). The Company pays interest on a monthly basis at a rate equal to SOFR Simple APR plus 2.0%. On March 31, 2023 and 2022, the interest rate was 6.82% and 3.21%, 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 each of March 31, 2023 and December 31, 2022, the outstanding balance on Fixed Line #1 was $0.1 million.

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 was obligated to pay the then outstanding principal balance in sixty equal monthly installments through maturity in September 2025. On each of March 31, 2023 and December 31, 2022, the outstanding balance on Fixed Line #2 was $0.5 million.

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 was 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 was 3.49%. As of March 31, 2023, Facility #4 was paid in full and there was no outstanding balance.

The Company secures its obligations under the Amended and Restated 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 Amended and Restated Agreement and Fixed Line loans. The Company must maintain, on a combined basis certain financial covenants defined in the Amended and Restated Agreement.

Interest expense on the Revolving and Fixed Lines totaled $12,000 and $10,000 during the three months ended March 31, 2023, and 2022, respectively.