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Long-Term Debt

12 Months Ended

Dec. 31, 2021

12. Long-Term Debt

Long-term debt consists of the following:

In thousands	2021		2020
8¼% Limited convertible senior subordinated notes due 2012	$	302	$	352
9½% Subordinated debentures due 2012		220		220
Revolving credit line – related party		1,189		-
Revolving credit line		-		612
Term loans – related party		1,000		1,000
Term loans		871		811
Total debt		3,582		2,995
Less deferred financing costs and debt discount		52		180
Net debt		3,530		2,815
Less portion due within one year		3,030		2,546
Net long-term debt	$	500	$	269

Payments of long-term debt due for the next five years are:

In thousands	2022		2023		2024		2025		2026		Thereafter
	$	3,082	$	-	$	11	$	12	$	12	$	465

On September 16, 2019, the Company entered into a loan agreement (the “Loan Agreement”) with MidCap. On June 3, 2020, March 23, 2021 and May 31, 2021, the Company and MidCap entered into modification agreements to the Loan Agreement. On July 30, 2021, MidCap assigned the loan to Unilumin. The Loan Agreement terminates on September 16, 2022, unless earlier terminated by the parties in accordance with the termination provisions of the Loan Agreement. The Loan Agreement allows the Company to borrow up to an aggregate of $4.0 million at an interest rate of the 3-month LIBOR interest rate plus 4.75% (12.00% at December 31, 2021) on a revolving credit loan based on accounts receivable, inventory and equipment for general working capital purposes. As of December 31, 2021, the balance outstanding under the Loan Agreement was $1.2 million. The Loan Agreement also requires the payment of certain fees, including a facility fee, an unused credit line fee and a collateral monitoring charge. The Loan Agreement contains financial and other covenant requirements, including financial covenants that require the Company to attain certain EBITDA amounts for certain periods, including the year ended December 31, 2021. The Company was not in compliance with this covenant. The Loan Agreement is secured by substantially all of the Company’s assets.

The Company entered into a loan note (the “Loan Note”) with the SBA (“Lender”) as lender under their Economic Injury Disaster Loan (“EIDL”) program, dated as of December 10, 2021. Under the Loan Note, the Company borrowed $500,000 from Lender under the EIDL Program. As of December 31, 2021, $500,000 was outstanding. The loan matures on December 10, 2051 and carries and interest rate of 3.75%. As of December 31, 2021, the Company had accrued less than $1,000 of interest related to the Loan Note, which is included in Accrued liabilities in the Consolidated Balance Sheets.

On April 23, 2020, the Company entered into a loan note (the “Loan Note”) with Enterprise Bank and Trust (“Lender”) as lender under the CARES Act of the Small Business Administration of the United States of America (“SBA”), dated as of April 20, 2020. Under the Loan Note, the Company borrowed $810,800 from Lender under the Paycheck Protection Program (“PPP”) included in the SBA’s CARES Act. As of December 31, 2021, $371,000 was outstanding. As of December 31, 2021, the Company had accrued less than $1,000 of interest related to the Loan Note, which is included in Accrued liabilities in the Consolidated Balance Sheets. The Loan Note proceeds were forgivable as long as the Company uses the loan proceeds for eligible purposes including payroll costs, including salaries, commissions, and similar compensation, group health care benefits, and paid leave; rent; utilities; and maintains its payroll levels. The unforgiven portion of the PPP loan was payable over two years at an interest rate of 1.00%, with a deferral of payments for the first six months. In January 2022, the loan was forgiven in full and the payments that had previously been paid were refunded.

The Company has a $500,000 loan from Carlisle Investments Inc. (“Carlisle”) at a fixed interest rate of 12.00%, which matured on April 27, 2019 with a bullet payment of all principal due at such time. Interest is payable monthly. As of December 31, 2021 and 2020, the entire amount was outstanding and is included in current portion of long-term debt in the Consolidated Balance Sheets. As of December 31, 2021 and 2020, the Company had accrued $240,000 and $180,000, respectively, of interest related to this loan, which are included in accrued liabilities in the Consolidated Balance Sheets. Marco Elser, a former director of the Company, exercises voting and dispositive power as investment manager of Carlisle.

The Company has an additional $500,000 loan from Carlisle at a fixed interest rate of 12.00%, which matured on December 10, 2017 with a bullet payment of all principal due at such time (the “Second Carlisle Agreement”). Interest is payable monthly. As of December 31, 2021 and 2020, the entire amount was outstanding and is included in current portion of long-term debt Consolidated Balance Sheets. As of December 31, 2021 and 2020, the Company had accrued $240,000 and $180,000, respectively, of interest related to this loan, which are included in accrued liabilities in the Consolidated Balance Sheets. Under the Second Carlisle Agreement, the Company granted a security interest to Carlisle in accounts receivable, materials and intangibles relating to a certain purchase order for equipment issued in April 2017.

As of December 31, 2021 and 2020, the Company had outstanding $302,000 and $352,000, respectively, of Notes. The Notes matured as of March 1, 2012 and are currently in default. As of December 31, 2021 and 2020, the Company had accrued $307,000 and $329,000, respectively, of interest related to the Notes, which is included in Accrued liabilities in the Consolidated Balance Sheets. The trustee, by notice to the Company, or the holders of 25% of the principal amount of the Notes outstanding, by notice to the Company and the trustee, may declare the outstanding principal plus interest due and payable immediately. On January 15, 2021, holders of $50,000 of the Notes accepted the Company’s offer to exchange each $1,000 of principal, forgiving any related interest, for $400 in cash, for an aggregate payment by the Company of $20,000. As a result of the transaction, the Company recorded a gain on the extinguishment of debt, net of expenses, of $77,000 in 2021.

As of December 31, 2021 and 2020, the Company had outstanding $220,000 of Debentures. The Debentures matured as of December 1, 2012 and are currently in default. As of December 31, 2021 and 2020, the Company had accrued $253,000 and $232,000, respectively, of interest related to the Debentures, which is included in Accrued liabilities in the Consolidated Balance Sheets. The trustee, by notice to the Company, or the holders of 25% of the principal amount of the Debentures outstanding, by notice to the Company and the trustee, may declare the outstanding principal plus interest due and payable immediately.

The Company had a $650,000 forgivable loan from the City of Hazelwood, Missouri. The loan would have been forgiven on a pro-rata basis if predetermined employment levels were attained. If the Company had attained the employment levels required by the forgivable loan, there would have been no interest due, otherwise interest accrued at a rate of prime plus 2.00%. As of December 31, 2019, the Company had accrued $118,000 of interest related to this loan, which is included in accrued liabilities in the Consolidated Balance Sheets. On July 2, 2020, the Company and the City of Hazelwood agreed to a termination of the loan and a forgiveness of all accrued interest. The principal balance of $650,000 was repaid on that date and the forgivable loan was satisfied in full. As a result of the termination, the Company recorded a gain on the extinguishment of debt of $137,000 in the year ended December 31, 2020.