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DEBT

9 Months Ended

Sep. 30, 2023

8.	DEBT

On March 24, 2016, the Company entered into the Amended and Restated Credit Agreement with the lenders named therein and BankUnited N.A. as Sole Arranger, Agent and Collateral Agent (as amended from time to time, the “Credit Agreement” or the “BankUnited Facility”). The BankUnited Facility originally provided for a revolving credit loan commitment of $30 million (the “Revolving Loan”) and a $10 million term loan (“Term Loan”). The Revolving Loan bears interest at a rate based upon a pricing grid, as defined in the Credit Agreement.

On March 23, 2023, the Company entered into a Twelfth Amendment to the Credit Agreement (the “Twelfth Amendment”). Under the Twelfth Amendment, the parties amended the Credit Agreement by: (a) extending the maturity date of the Company’s existing revolving line of credit and its existing term loan to November 30, 2024 (under the terms of the Credit Agreement, the outstanding principal balance of the term loan was repaid by June 30, 2023); (b) providing for reduction of the aggregate maximum principal amount of all revolving line of credit loans to $20,520,000 from October 1, 2023 through December 31, 2023, $19,800,000 from January 1, 2024 through June 30, 2024, $19,080,000 from April 1, 2024 through June 30, 2024, $18,360,000 from July 1, 2024 through September 30, 2024, and $17,640,000 from October 1, 2024 and thereafter, and for payments to be made by the Company to comply therewith (if any such payments are necessary), on the first day of each such period; and (c) payment of a $250,000 capitalized fee incurred in connection with the Eighth Amendment to the Credit Agreement, which the Company entered into on October 28, 2021 (the “Eighth Amendment”) in two installments, the first installment paid on June 1, 2023 in the amount of $116,667 and the second installment paid July 1, 2023 in the amount of $133,333, together with all unpaid interest accrued at the term loan interest rate on the capitalized fee through each such date (the installments and interest accrued were paid on such dates).

The Credit Agreement, as amended, requires us to maintain the following financial covenants: (a) minimum debt service coverage ratio of no less than 1.5 to 1.0 for trailing four fiscal quarter periods; (b) maximum leverage ratio of no less than 4.0 to 1.0 for trailing four fiscal quarter periods; (c) minimum net income after taxes as of the end of each fiscal quarter being no less than $1.00; and (d) a minimum adjusted EBITDA at the end of each fiscal quarter of no less than $1.0 million. The additional principal payments, increase in interest and the Amendment Fee provided for in the Eighth Amendment and Ninth Amendment to the Credit Agreement, which the Company entered into on April 12, 2022 are excluded for purposes of calculating compliance with each of the financial covenants.

The BankUnited Facility is secured by all of the Company’s assets and both the Revolving Loan and Term Loan bear interest at the Prime Rate + 3.50%. The Prime Rate was 8.50% as of September 30, 2023 and as such, the Company’s interest rate on the Revolving Loan and Term Loan was 12.00% as of September 30, 2023.

As of September 30, 2023 and December 31, 2022, the Company had $20,760,000 and $21,000,000 million outstanding under the Revolving Loan, respectively. $2,400,000 of the Revolving Loan is payable by September 30, 2024 and the remaining balance of $17,640,000 of the revolving line of credit matures and is payable by November 30, 2024.

The Term Loan was fully repaid as of September 30, 2023 as compared to an aggregate principal amount outstanding as of December 31, 2022 of $1,583,333.

The Company has cumulatively paid approximately $962,000 of total debt issuance costs in connection with the BankUnited Facility, of which approximately $104,000 is included in other assets at September 30, 2023.

Also included in long-term debt are financing leases of $100,375 and $207,414 at September 30, 2023 and December 31, 2022, respectively, including a current portion of $66,311 and $136,433, respectively. The maturities of the September 30, 2023 balance of these financing leases are as follows:

For the Year Ending December 31,
Remainder of 2023	$	19,546
2024		51,801
2025		29,028
Total	$	100,375