|9 Months Ended|
Sep. 30, 2019
|Debt Disclosure [Abstract]|
The Company maintains credit facilities with JPMorgan Chase Bank, N.A. (“Chase”), whereby Chase provides (i) a $15,000,000 revolving credit facility (“Revolver”), (ii) a $6,000,000 revolving credit facility (“Revolver B”), (iii) a $10,000,000 Term Loan (“Term Loan A”), (iv) a $1,730,895 Mortgage Loan (“Term Loan B”), (v) a $1,358,000 Mortgage Loan (“Term Loan C”); collectively referred to as the “Credit Facilities.”
On August, 14 2019, the Company entered into a new amendment to the Credit Agreement (the “Tenth Amendment”), effective August 14, 2019. Pursuant to the terms of the Tenth Amendment, the parties have incorporated, among other changes, amended definitions of indebtedness and Liens which allowed Epsilor-EFL to secure financing for its operations up to $6,000,000 million using its assets as security.
In August 2019, Epsilor-EFL entered into an agreement with Bank Leumi Le-Israel (“Leumi”), whereby Leumi provided a loan of NIS 6,000,000 ($1,697,313) (the “Loan”), as well as access to a line of credit of NIS 4,000,000 (together with the Loan, the “Epsilor Credit Facility”). The Loan will be repaid in 60 monthly payments starting in October 2019. The Loan bears an interest rate of LIBOR plus 1.69%. The effective interest rate for the Loan at September 30, 2019 was 3.44%. As of September 30 2019, the line of credit was not used. The Epsilor Credit Facility is secured by Epsilor-EFL’s assets.
On July 24, 2019, we entered into a new amendment to the Credit Agreement (the “Ninth Amendment”), effective June 30, 2019. Pursuant to the terms of the Ninth Amendment, the parties have incorporated, among other changes, amended definitions of eligible unbilled accounts associated with certain long term contracts and borrowing base.
On April 22, 2019, the Company entered into a new amendment to the Credit Agreement (the “Eighth Amendment”), effective March 31, 2019. Pursuant to the terms of the Eighth Amendment, the parties have incorporated, among other changes, amended definitions of fixed charge coverage ratios and leverage ratios for specific quarters in 2019, and the Company has been given a second revolving line (“Revolver B”) in the amount of $6,000,000, reducing to $3,000,000 at the end of 2019 and due to be paid in full by February 28, 2020.
The Credit Facilities maintain certain reporting requirements, conditions precedent, affirmative covenants and financial covenants. The Company is required to maintain certain financial covenants. The Eighth Amendment to the credit facilities adjusted the financial covenant ratios for the Company’s reporting periods during fiscal year 2019. The amended Maximum Debt to EBITDA ratio of 3.75 to 1.00 for the period ended March 31, 2019, 5.50 to 1.00 for the period ended June 30, 2019, 6.25 to 1.00 for the period ended September 30, 2019, 4.00 to 1.00 for the period ended December 31, 2019 and 3.00 to 1.00 for periods ending after December 31, 2019. The amended Minimum Fixed Charge Coverage Ratio is 1.20 to 1.00 for the period ended March 31, 2019, 1.00 to 1.00 for the periods ended June 30, 2019 and September 30, 2019, and 1.20 to 1.00 for the periods ending after September 30, 2019. The Company was in compliance with its covenants at September 30, 2019.
The Credit Facilities are secured by the Company’s assets and the assets of the Company’s domestic subsidiaries.
A summary of our debt, including our debt under the Credit Agreement, is as follows:
The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef