The Company used approximately 60% of the PPP Loan proceeds to pay for payroll costs and the balance on other eligible qualifying expenses consistent with the terms of the PPP and submitted its forgiveness application to the Lender during the third quarter of 2021. During the third quarter, the entire loan in the amount of $4,000,000 and the accrued interest of $57,000 was forgiven by the SBA and a gain of $4,057,000 was recorded in “Other income/(expense)” in the Company’s consolidated statements of operations.

B.)

As of March 20, 2020, the Company has a $6,000,000 line of credit. Through December 31, 2021, the interest rate is a rate per year equal to the bank’s prime rate or Libor plus 2.15%. In addition, effective December 20, 2021, the Company is required to pay a commitment fee of 0.25% on the unused portion of the line of credit.

On January 11, 2022, the Company executed an amendment to the loan agreement, which extended the line of credit availability period from December 31, 2022 to December 31, 2023. The amended agreement suspended the Debt Service Coverage Ratio loan covenant up through and including the third quarter of 2022. A Quarterly Minimum Cash Flow measurement loan covenant replaced the Debt Service Coverage Ratio loan covenant. Minimum Cash Flow means net income, plus depreciation, depletion, and amortization expense, plus interest expense, plus non-cash expense related to the Servotronics, Inc. Employee Stock Ownership Plan, plus non-cash stock and stock option transactions.

Through the third quarter of 2022, the amended agreement requires the Company to maintain a minimum liquidity, defined as cash on hand plus line of credit availability of at least $9,000,000.

The interest rate is a rate per year equal to the sum of (i) the greater of the Bloomberg’s Short-Term Bank Yield (BSBY) Daily Floating Rate or the Index Floor, plus (ii) 1.65 percentage point(s). For purposes of this paragraph, “Index Floor” means 0.5 percent.

The line of credit is secured by all personal property of the Company with the exception of certain equipment that was purchased from proceeds of government grants. There was $4,250,000 balance outstanding at December 31, 2021 and $3,750,000 balance at December 31, 2020.

C.)

The term loans were and the line of credit is secured by all personal property of the Company with the exception of certain equipment that was purchased from proceeds of government grants. Certain lenders require the Company to comply with debt covenants as described in the specific loan documents, including a debt service ratio. At December 31, 2021 and December 31, 2020 the Company was in compliance with these covenants.

D.)

The Company had an equipment loan facility in the amount of $1,000,000 available until July 9, 2021. This line was non-revolving and non-renewable. The loan term for the equipment covered by the agreement is 60 months. Monthly payments are fixed for the term of each funding based upon the Lender’s lease pricing in effect at the time of such funding. During the year ended December 31, 2021, approximately $384,000 was drawn on this facility. There was approximately $712,000 outstanding at December 31, 2021 and $534,000 balance outstanding at December 31, 2020.

E.)

The Company established a lease line of credit for equipment financing in the amount of $1,000,000 available until June 28, 2018. This line was non-revolving and non-renewable. The lease term for equipment covered by the lease line of credit is 60 months. Monthly payments are fixed for the term of each funding based upon the Lender’s lease pricing in effect at the time of such funding. There was approximately $64,000 outstanding at December 31, 2021 and $310,000 at December 31, 2020.

Principal maturities of long-term debt are as follows: 2022 - $276,000, 2023 - $4,481,000, 2024 - $182,000, 2025 - $77,000 and 2026 - $10,000. Remaining principal payments for the capital note and finance lease obligations for each of the next five years:


		December 31,
	Year	2021
		($000's omitted)
	2022		296
	2023		246
	2024		192
	2025		83
	2026		11
Total principal and interest payments			828
Less amount representing interest			(52)
Present value of net minimum lease payments			776
Less current portion			(276)
Long term principle payments		$	500