DEBT |
12 Months Ended |
|---|---|
Dec. 31, 2024 | |
| Debt Disclosure [Abstract] | |
| DEBT | NOTE 8 – DEBT
Factoring Facility
Gulf Coast Bank and Trust
On November 4, 2016, the Company entered into a factoring and security agreement with Triumph Business Capital (“Triumph”), which was amended in January 2020. The current agreement has an advance rate of 15 basis points, and the interest rate is prime plus 2%. The amount of an invoice eligible for sale is 93%. The agreement is on month-to-month terms.
On August 24, 2023, we were notified by that our factoring arrangement had been sold to Gulf Coast Bank and Trust (“Gulf”), by Triumph who decided to sell its non-transportation portfolio. The transition took place in August 2023 with new financing coming from Gulf. The Company continues to be obligated to meet certain covenants with respect to invoicing and reserve account balance.
In accordance with the agreement, a reserve amount is required for the total unpaid balance of all purchased accounts multiplied by a percentage equal to the difference between one hundred percent and the advanced rate percentage. As of December 31, 2024, the required amount was 10%. Any excess of the reserve amount is paid to the Company on a weekly basis, as requested. If a reserve shortfall exists for a period of ten days, the Company is required to make payment to the financial institution for the shortage.
Accounts receivables were sold with full recourse. Proceeds from the sale of receivables were $9,132 and $3,768 for the years ended December 31, 2024 and 2023, respectively. Repayments totaled $6,930 and $6,214 for the years ending December 31, 2024 and 2023, respectively. Thus, the total outstanding balance under the recourse contract was $2,375and $174 as of December 31, 2024 and 2023, respectively.
The Factoring Facility is collateralized by substantially all the assets of the Company. In the event of a default, the Factor may demand that the Company repurchase the receivable or debit the reserve account. Total finance line fees for the years ended December 31, 2024 and 2023 totaled $108 and $92, respectively. and are included in other income (expense) in the accompanying consolidated statement of operations.
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