5. Long-Term Debt


	March 31,		December 31,
	2020		2019
	($000’s omitted)
Line of credit payable to a financial institution; Interest rate option of bank prime or Libor plus 1.4% (3.07% as of March 31, 2020) (A) (B)	$	3,750	$	3,000

Term loan payable to a financial institution; Interest rate option of bank prime or Libor plus 1.4% (2.981130% as of March 31, 2020), monthly prinicipal payments of $21,833 through 2021 with a balloon payment of $786,000 due December 1, 2021 (B)		1,245		1,310

Term loan payable to a financial institution; Interest rate option of bank prime or Libor plus 1.4% (2.981130% as of March 31, 2020), monthly prinicipal payments of $23,810 through December 1, 2021 (B)		500		571

Equipment note obligations; Interest rate fixed for term of each funding based upon the Lender’s lease pricing at time of funding. (Interest rate/factor 1.8259% - 1.835015% as of March 31, 2020) (C)		637		670

Equipment financing lease obligations; Interest rate fixed for term of each funding based upon the Lender's lease pricing at time of funding. (Interest rate/factor 3.3943% - 3.8527% at time of funding) (D)		428		468
		6,560		6,019
Less current portion		(849)		(849)
	$	5,711	$	5,170

A.)

As of March 20, 2020, the Company increased its line of credit from $4,000,000 to $6,000,000. The interest rate is a rate per year equal to the bank’s prime rate or Libor plus 1.4%. In addition, effective June 17, 2019, the Company is required to pay a commitment fee of 0.15% on the unused portion of the line of credit. The line of credit expires June 19, 2021. There was $3,750,000 balance outstanding at March 31, 2020 and $3,000,000 balance at December 31, 2019.

B.)

The term loans and line of credit are secured by all personal property of the Company with the exception of certain equipment that was purchased from proceeds of government grants. Certain lenders require the Company to comply with debt covenants as described in the specific loan documents, including a debt service ratio. At March 31, 2020 and December 31, 2019 the Company was in compliance with these covenants.

C.)

The Company had an equipment loan facility in the amount of $2,500,000 available until November 30, 2019. This line was non-revolving and non-renewable. The Company used approximately $721,000 of the available funds for the purchase of machinery and equipment. The loan term for the equipment covered by the agreement is 60 months. Monthly payments are fixed for the term of each funding based upon the Lender’s lease pricing in effect at the time of such funding. There was approximately $637,000 outstanding at March 31, 2020 and $670,000 at December 31, 2019.

D.)

The Company established a lease line of credit for equipment financing in the amount of $1,000,000 available until June 28, 2018. This line was non-revolving and non-renewable. The lease term for equipment covered by the lease line of credit is 60 months. Monthly payments are fixed for the term of each funding based upon the Lender’s lease pricing in effect at the time of such funding. There was approximately $428,000 outstanding at March 31, 2020 and $468,000 at December 31, 2019.

Principal maturities of long-term debt are as follows: 2020 - $640,000, 2021 - $5,385,000, 2022 - $288,000, 2023 - $154,000, and 2024 - $93,000. Remaining principal payments and interest payments for the capital note and capital financing lease obligations for each of the next five years:


	March 31,		December 31,
	2020		2019
	($000’s omitted)

2020	$	249	$	331
2021		331		331
2022		316		316
2023		169		169
2024		97		97
Total principal and interest payments		1,162		1,244
Less amount representing interest		(97)		(106)
Present value of net minimum lease payments		1,065		1,138
Less current portion		(301)		(301)
Long term principle payments	$	764	$	837

As of April 21, 2020 the Company executed a promissory note (the “Note”) in the amount of $4,000,000 as part of the Paycheck Protection Program (the “PPP Loan”) administered by the Small Business Administration (the “SBA”) and authorized under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The PPP Loan is being made through the Bank of America, NA (the “Lender’).

The term of the PPP Loan is two years with an annual interest rate of 1.00%. Payments of principal and interest on the PPP Loan will be deferred for the first six months of the loan term. Commencing one month after the expiration of the deferral period, the Company is required to pay the Lender the principal amount outstanding on the PPP Loan at the end of the deferral period. Equal monthly payments of principal and interest as required to fully amortize by the second anniversary of the effective date of the PPP Loan. The Company may prepay the PPP Loan at any time without payment of any penalty or premium. The Note contains customary events of default for a loan of this type. The occurrence of an event of default may result in the Lender requiring the repayment of all amounts outstanding, collection of all amounts owing from the Company, or filing suit and obtaining judgment against the Company.

Under the terms of the CARES Act, the PPP Loan recipients can apply for and be granted forgiveness for all or a portion of loans granted under the PPP. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and the maintenance of its employment levels. No assurance can be given that the Company will obtain forgiveness of the PPP Loan in whole or in part.