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Note 7 - Line of Credit and Long-term Debt

9 Months Ended

Sep. 30, 2021

7. Line of credit and long-term debt

At September 30, 2021 the Company maintained a line of credit, which was assumed in the acquisition of Global Cooling, with a bank which had an original expiration date of June 2023. The outstanding balance bore interest at a floating rate equal to the 3-month LIBOR rate plus 5.50%. The maximum allowed on the line of credit was $5,000,000. The line was secured by substantially all assets of Global Cooling. On October 14, 2021, the Company paid off the entirety of the outstanding balance on the line of credit and all related interest.

Long-term debt consisted of the following as of September 30, 2021 and December 31, 2020:

					September 30,			December 31,
(In thousands)	Maturity Date	Interest Rate			2021			2020
2019 term loan	Sep-23		10.5	%	$	1,750		$	-
2018 term loan	Sep-23		10.5	%		2,813			-
Insurance premium financing	Apr-22		4.0	%		726			-
Paycheck Protection Program loan	May-22		1.0	%		295			295
Freezer equipment loan	Dec-25		5.7	%		652			365
Manufacturing equipment loans	Oct-25		5.7	%		376			439
Freezer installation loan	Various		6.3	%		1,395			156
Other loans	Various	Various				10			14
Total debt						8,017			1,269
Less: Unamortized debt issuance costs						(124	)		-
Total debt, net of unamortized debt issuance costs					$	7,893		$	1,269

The 2019 and 2018 term loans are secured by substantially all assets of Global Cooling.

As of September 30, 2021, the scheduled maturities of loans payable for each of the next five years and thereafter were as follows:

(In thousands)	Amount
2021 (3 months remaining)	$	950
2022		1,208
2023		2,038
2024		1,944
2025		543
Thereafter		1,334
Total	$	8,017

Debt covenants and default provisions

The line of credit, 2019 term loan, and 2018 term loan assumed in the acquisition of Global Cooling contain affirmative and negative covenants that are customary for financings of their respective types. As of September 30, 2021, the Company was not in compliance with certain reporting and financial covenants. To remedy the non-compliance related to the financial covenants associated with the line of credit, the Company paid off the entirety of the outstanding balance on the line of credit and all related interest on October 14, 2021. To remedy the non-compliance related to the financial covenants associated with the 2019 and 2018 term loans, the Company entered into amended and restated term notes.

On October 1, 2021, the Company entered into amended and restated term notes (the “Loan Agreements”) with Advantage Capital (“Advantage”) and Enhanced Capital (“Enhanced”). Pursuant to the Loan Agreements, Advantage provided two term notes in the amount of $1.4 million (“Advantage Term Note I”) and $1.4 million (“Advantage Term Note II”) (collectively the “Advantage Term Notes”). Enhanced provided one term note in the amount of $1.8 million (the “Enhanced Term Note”). The Advantage and Enhanced Term Notes were used to refinance the term notes outstanding under the amended and restated term notes dated December 7, 2018 and October 1, 2019, respectively, mature on December 18, 2027 and September 7, 2024, respectively, and bear interest at a fixed rate of 4%. The Advantage and Enhanced Term Notes are interest-only with one balloon principal payment at maturity and can be pre-paid without penalty at any time. All financial covenants included in the original agreements previously in effect were removed by the Loan Agreements.