XML 38 R22.htm IDEA: XBRL DOCUMENT v3.10.0.1
Secured Revolving Credit Facility
9 Months Ended
Sep. 30, 2018
Debt Disclosure [Abstract]  
Secured Revolving Credit Facility

Note 14 – Secured Revolving Credit Facility

 

On August 17, 2017, the Company entered into the Loan Agreement with Tech Capital. The Loan Agreement provides for a secured asset-based revolving credit facility of up to $1,000,000, which the Company may draw upon and repay from time to time during the term of the Loan Agreement. The outstanding principal balance of the Loan Agreement was approximately $163,000 and $711,000 as of September 30, 2018 and December 31, 2017, respectively. The Company is using these proceeds for working capital and general corporate purposes.

 

The Loan Agreement has a term of 12 months, which was automatically renewed on August 17, 2018 and will automatically renew for successive 12-month periods unless cancelled. Availability under the Loan Agreement will be based upon periodic borrowing base certifications valuing certain of the Company’s accounts receivable and inventory. Outstanding borrowings under the Loan Agreement accrue interest, which shall be payable monthly based on the average daily outstanding balance, at a rate equal to 3.5% plus the prime rate per annum, provided that such prime rate shall not be less than 4.25% per annum. As of September 30, 2018, the current interest rate was 8.75% per annum.

 

The Company also granted to Tech Capital a first priority security interest in its assets, including its accounts receivable and inventory, to secure all of its obligations under the Loan Agreement. In addition, Nephros International Limited, the Company’s wholly-owned subsidiary, unconditionally guaranteed the Company’s obligations under the Loan Agreement.

 

For the three and nine months ended September 30, 2018, approximately $9,000 and $18,000, respectively, was recognized as interest expense on the condensed consolidated statement of operations and comprehensive loss. As of September 30, 2018, approximately $1,000 of the $18,000 of interest expense incurred for the nine months ended September 30, 2018 is included in accrued expenses on the condensed consolidated balance sheet.

 

For the three and nine months ended September 30, 2017, approximately $18,000 was recognized as interest expense on the condensed consolidated statement of operations and comprehensive loss, which includes the debt issuance costs of approximately $12,000 in addition to interest expense incurred of approximately $6,000 on the revolving facility.