Quarterly report [Sections 13 or 15(d)]

Long Term Debt

Long Term Debt

3 Months Ended

Mar. 31, 2025

Debt Disclosure [Abstract]

Long Term Debt

8. Long Term Debt

Long-term debt consists of the following as of March 31, 2025, and December 31, 2024:

Schedule of Long Term Debt

(Amounts in Thousands)	March 31, 2025				December 31, 2024
Revolving Credit facility dated May 8, 2020, borrowings based upon eligible accounts receivable, subject to monthly borrowing base calculation, balance due on May 15, 2027. Effective interest rates for first quarter of 2025 was 9.5% ⁽¹⁾	$	—			$	—
Revolving Credit facility dated May 8, 2020, borrowings based upon eligible accounts receivable, subject to monthly borrowing base calculation, balance due on May 15, 2027. Effective interest rates for first quarter of 2025 was 9.5% ⁽¹⁾	$	—			$	—
Term Loan dated July 31, 2023, payable in equal monthly installments of principal, balance due on May 15, 2027. Effective interest rates for first quarter of 2025 was 8.2% ⁽¹⁾		1,708				1,834
Capital Loan dated May 4, 2021, payable in equal monthly installments of principal, balance due on May 15, 2027. Effective interest rates for first quarter of 2025 was 7.7% ⁽¹⁾		227				253
Debt Issuance Costs ⁽²⁾		(174	)	⁽²⁾		(178	)	⁽²⁾
Notes Payable up to 2044, with annual interest rates ranging from 8.2% to 10.7% ⁽³⁾		401				406
Total debt		2,162				2,315
Less current portion of long-term debt		541				550
Long-term debt	$	1,621			$	1,765

⁽¹⁾	Our revolving credit facility is collateralized by our accounts receivable, and our term loan and capital loan are collateralized by our property, plant, and equipment.

⁽²⁾	Aggregate unamortized debt issuance costs in connection with the Company’s credit facility, which consists of the revolving Credit, Terms Loan and Capital Loan, as applicable.

⁽³⁾	Includes a promissory note entered into on July 24, 2024, in connection with the purchase of the Company’s EWOC property which include a variable interest rate provision, which interest rate will be adjusted at the end of years five, ten and fifteen from the date of the note.

Credit Facility

The Company entered into a Second Amended and Restated Revolving Credit, Term Loan and Security Agreement, dated May 8, 2020, which has since been amended, with PNC National Association (“PNC” and “lender”), acting as agent and lender (the “Loan Agreement”). The Loan Agreement provides the Company with a credit facility with a maturity date of May 15, 2027 (the “Credit Facility”) which consists of the following as of March 31, 2025: (a) up to $12,500,000 revolving credit (“revolving credit”), which borrowing capacity is subject to eligible receivables (as defined) and reduced by outstanding standby letters of credit ($3,200,000 as of March 31, 2025) and borrowing reductions that the Company’s lender may impose from time to time ($750,000 as of March 31, 2025); (b) a term loan (“Term Loan”) of $2,500,000, requiring monthly installments of $41,667; and (c) a capital expenditure loan (“Capital Loan”) of approximately $524,000, requiring monthly installments of principal of approximately $8,700 plus interest.

Pursuant to the Loan Agreement, payments of annual interest rates are as follows: (i) interest due on the revolving credit is at prime (7.50% at March 31, 2025) plus 2% or Secured Overnight Finance Rate (“SOFR”) (as defined in the Loan Agreement) plus 3.00% plus an SOFR Adjustment applicable for an interest period selected by the Company; (ii) interest due on the Capital Loan is at prime plus 2.50% or SOFR plus 3.50% plus an SOFR Adjustment applicable for an interest period selected by the Company; and (iii) interest due on the Term Loan is at prime plus 3% or SOFR plus 4.00% plus an SOFR Adjustment applicable for an interest period selected by the Company. SOFR Adjustment rates of 0.10% and 0.15% are applicable for a one-month interest period and three-month period, respectively, that may be selected by the Company.

The Company agreed to pay PNC 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 Loan Agreement, as amended, after July 31, 2025.

On March 11, 2025, the Company entered into an amendment to its Loan Agreement with its lender which provided the following, among other things:

	●	removed the quarterly fixed charge coverage ratio (“FCCR”) covenant testing requirement utilizing a twelve-month trailing basis; however, such FCCR testing requirement will be triggered on the day the Company fails to meet a minimum of $5,000,000 in daily Liquidity (defined under the Loan Agreement as borrowing availability under the revolving credit plus cash in the money market deposit account (“MMDA”) maintained with the Company’s lender). If triggered, the Company will be required to show compliance of a FCCR ratio of not less than 1.15 to 1.00 utilizing a trailing twelve-month-period ended starting with the most recently reported fiscal quarter and each fiscal quarter thereafter. The FCCR testing requirement can be removed again once the Company is able to achieve a minimum of $5,000,000 in daily Liquidity for a thirty-consecutive-day period from the trigger date;

	●	revised the Facility Fee (as defined) from .375% to .500%. Such fee percentage will revert back to .375% at such time that the Company is able to achieve a minimum 1.15 to 1.00 ratio in FCCR on a twelve-month trailing basis; and

	●	required payment of an amendment fee of $12,500, by the Company which is being amortized over the remaining term of the Loan Agreement as interest expense-financing fees.

As of March 31, 2025, the Company had no outstanding borrowing under its revolving credit and its Liquidity was approximately $29,277,000.

The Company’s Loan Agreement, as amended, with PNC contains certain financial covenant requirements, along with customary representations and warranties. A breach of any of these financial covenant requirements, unless waived by PNC, could result in a default under the Company’s Loan Agreement allowing its lender to immediately require the repayment of all outstanding debt under the Company’s Loan Agreement and terminate all commitments to extend further credit. The Company met all of its financial covenant requirements in the first quarter of 2025.