Accounts Receivable Agreements

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Accounts Receivable Agreements

Accounts Receivable Agreements

The Company maintains accounts receivable purchase facilities for its Nave and Triton subsidiaries with its primary financial lender with capacities of $10.0 million for Nave and $3.0 million for Triton. The lender charges a fee of 1.75% of sold receivables. The Company also maintains accounts receivable purchase facilities for its Fulton subsidiary, providing a credit capacity excluding a major customer of $3.0 million, with a fee of 2.0% of sold receivables, and credit capacity secured by receivables of a major customer of $3.0 million, with a fee of 1.6% of sold receivables.

All four facilities are secured by the subsidiary's receivables, and the lender advances 90% of sold receivables and establishes a reserve of 10% of the sold receivables at initial sale, which increases to 100% over time after 120 days, until the Company collects the sold receivables. All four facilities mature on December 17, 2023.

The Company has a total capacity under all four facilities of $19.0 million. As of March 31, 2023, the lender has a reserve against the sold receivables of $1.5 million, which is reflected as restricted cash on the consolidated balance sheets.  The facilities agreements address events and conditions which may obligate the Company to immediately repay the institution the outstanding purchase price of the receivables sold. The total amount of receivables uncollected by the institution was $7.0 million at March 31, 2023.  Although the sale of receivables is with recourse, the Company did not record a recourse obligation at March 31, 2023 as the Company concluded that the sold receivables are collectible. 

For the three months ended March 31, 2023, the Company received proceeds from the sold receivables under all of their various agreements of $12.9 million and included the proceeds in net cash provided by operating activities in the consolidated statements of cash flows. The Company recorded related costs of $0.2 million for the three months ended March 31, 2023, in other expense in the consolidated statements of operations.