On January 11, 2022, the Company executed an amendment to the loan agreement, which extended the line of credit. 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 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 approximately $4,250,000 balance outstanding at March 31, 2022 and December 31, 2021.

B.)

The Company established 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. There was approximately $657,000 outstanding at March 31, 2022 and $712,000 balance outstanding at December 31, 2021.

C.)

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 $49,000 outstanding at March 31, 2022 and $64,000 at December 31, 2021.

Principal maturities of long-term debt are as follows: 2022 - $206,000; 2023 - $4,481,000; 2024 - $182,000; 2025 - $77,000; and 2026 - $10,000. Remaining principal payments for the capital note and capital lease obligations for each of the next five years:


	March 31,		December 31,
	2022		2021

	($000’s omitted)

2022	$	225	$	296
2023		246		246
2024		192		192
2025		83		83
2026		11		11
Total principal and interest payments		757		828
Less amount representing interest		(51)		(52)
Present value of net minimum loan/lease payments		706		776
Less current portion		(266)		(276)
Long term principle payments	$	440	$	500