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Note 5 - Long-Term Debt

12 Months Ended

Dec. 31, 2022

NOTE 5 - LONG TERM DEBT

On April 9, 2021 the Company along with certain of its domestic subsidiaries (collectively, the “Loan Parties”) entered into a five year $22,000,000 credit agreement with Fifth Third Bank, N.A. (“the Credit Agreement”). The Credit Agreement includes three loan facilities. The first loan facility is a $9,500,000 term loan (the “Term Loan”) of which $6,774,000 was used to refinance the domestic Gamma Knife debt and finance leases, and associated closing costs, $1,665,000 was used to finance two Gamma Knife reloads and to pay for the unload costs for two customer contracts in the first quarter of 2021, with the remaining $1,061,000 available for future projects. The second loan facility is a $5,500,000 delayed draw term loan (the “DDTL”) of which $5,026,000 was used to refinance the Company’s PBRT finance leases and associated closing costs as well as to provide additional working capital. The third loan facility provides for a $7,000,000 revolving line of credit (the “Revolving Line”) available for future projects and general corporate purposes. The facilities have a five-year maturity, carry a floating interest of LIBOR plus 3.0% and are secured by a lien on substantially all of the assets of the Loan Parties and guaranteed by ASHS. The Company recorded a loss on extinguishment of debt of $401,000 during the year ended December 31, 2021, related to the prepayment penalties charged by the existing lenders. The Company capitalized debt issuance costs of $310,000 related to legal and transaction fees for the Credit Agreement during the year ended December 31, 2021. The long-term debt on the consolidated balance sheets related to the Term Loan and DDTL was $12,624,000 and $14,437,000 as of December 31, 2022 and 2021, respectively.

As of December 31, 2021, LIBOR will no longer be used to price new loans, but 1-month, 3-month, 6-month and 12-month maturities will continue to be published through 2023. The Company is working with Fifth Third Bank to determine an alternative base rate. The Revolving Line is charged an unused line fee of 0.25% per annum. The Term Loan and DDTL have interest and principal payments due quarterly. Principal amortization on an annual basis for the Term Loan and DDTL equates to 48% of the original principal loan commitments in years one through five and an end of term payment of the remaining principal balance.

The Credit Agreement contains customary covenants and representations, including without limitation, a minimum fixed charge coverage ratio of 1.25 and maximum funded debt to EBITDA ratio of 3.0 to 1.0 (tested on a trailing twelve-month basis at the end of each fiscal quarter), reporting obligations, limitations on dispositions, changes in ownership, mergers and acquisitions, indebtedness, encumbrances, distributions, investments, transactions with affiliates and capital expenditures. The Loan Parties are in compliance with the Credit Agreement covenants as of December 31, 2022.

The loan entered into with DFC in connection with the acquisition of GKCE in June 2020 (the “DFC Loan”) was obtained through the Company’s wholly-owned subsidiary, HoldCo and is guaranteed by GKF. The DFC Loan is secured by a lien on GKCE’s assets. The amount outstanding under the DFC Loan is payable in 29 quarterly installments with a fixed interest rate of 3.67%. The Company’s loan with DFC also contains customary covenants and representations, which the Company is in compliance with as of December 31, 2022. The long-term debt on the consolidated balance sheets related to the DFC loan was $1,041,000 and $1,261,000 as of December 31, 2022 and 2021, respectively. The Company capitalized debt issuance costs of $9,000 and $15,000 as of December 31, 2022 and 2021, respectively, related to maintenance and administrative fees on the DFC Loan.

The accretion of debt issuance costs for the years ended December 31, 2022 and 2021, was $84,000 and $59,000, respectively. As of December 31, 2022 and 2021, the unamortized debt issuance costs on the consolidated balances sheets were $198,000 and $294,000.

The following are contractual maturities of long-term debt by year at December 31, 2022, excluding debt issuance costs of $198,000:

Year ending December 31,	*Principal*
2023	$	1,344,000
2024		2,094,000
2025		2,469,000
2026		7,594,000
2027		164,000
	$	13,665,000