Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

Subsequent Events

6 Months Ended

Jun. 30, 2023

15. Subsequent Events

Management evaluated events occurring subsequent to June 30, 2023 through August 3, 2023, the date these condensed consolidated financial statements were available for issuance, and other than as noted below determined that no material recognizable subsequent events occurred.

Credit Facility

On July 31, 2023, the Company entered into an amendment (the “July 31, 2023 Amendment”) with PNC to its Second Amended and Restated Revolving Credit, Term Loan and Security Agreement dated May 8, 2020, as amended (the “Amended Loan Agreement”). The July 31, 2023 Amendment provided the following, among other things:

	●	extended the maturity date of the Amended Loan Agreement to May 15, 2027, from May 15, 2024;
	●	an additional term loan (“Additional Term Loan”) to the Company in the amount of $2,500,000, requiring monthly installments of approximately $41,667. Payment of annual rate of interest due on the Additional Term Loan is at prime plus 3.00% or SOFR (as defined in the Amended Loan Agreement) plus 4.00% plus an SOFR Adjustment applicable for an interest period selected by the Company. A SOFR Adjustment rate of 0.10% and 0.15% is applicable for a one-month interest period and three-month period, respectively, that may be selected by the Company;
	●	removed the minimum Tangible Adjusted Net Worth (as defined in the agreement) covenant requirement;
	●	placed an indefinite reduction in borrowing availability of $750,000; and
	●	allows for up to $2,500,000 in capital expenditure made in fiscal year 2023 and thereafter to be treated as financed capital expenditure in the Company’s quarterly fixed charge coverage ratio covenant calculation requirement.

At maturity of the Amended Loan Agreement, any unpaid principal balance plus interest, if any, will become due.

Pursuant to the July 31, 2023 Amendment, the Company has agreed to pay PNC 1.0% of the total financing under the Amended Loan Agreement in the event the Company pays off its obligations on or before July 31, 2024, and 0.5% of the total financing if the Company pays off its obligations after July 31, 2024, to and including July 31, 2025. No early termination fee shall apply if the Company pays off its obligations under the Amended Loan Agreement after July 31, 2025.

In connection with the July 31, 2023 Amendment, the Company paid its lender a fee of $100,000.

All other terms of the Amended Loan Agreement remain principally unchanged.