7.  BANK DEBT 

Debt balances consisted of the following:

Revolving Credit Facility

The Company and certain of its subsidiaries are parties to a Credit Agreement with JPMorgan Chase Bank, N.A. as lender (as amended, the “Credit Agreement”), which provides for a $30 million revolving credit facility that matures on June 1, 2027.

The revolving facility under the Credit Agreement includes a $3 million sublimit for the issuance of letters of credit thereunder. Interest for borrowings under the revolving facility accrues at a per annum rate equal to Prime Rate or SOFR plus applicable margins of (i) (0.25%) for Prime Rate loans and (ii) 1.75% for SOFR loans. The Credit Agreement includes a commitment fee on the unused portion of the revolving facility of 0.25% per annum payable quarterly. The maximum annual amount that the Company and its subsidiaries may pay in dividends or other restricted payments is $2 million.

The obligations of the Company and other borrowers under the Credit Agreement are secured by a blanket lien on all the assets of the Company and its subsidiaries. The Credit Agreement also includes customary representations and warranties and applicable reporting requirements and covenants. The financial covenants under the Credit Agreement include a minimum fixed charge coverage ratio, a maximum senior funded debt to EBITDA ratio and a maximum total funded debt to EBITDA ratio.

The Company had $17.1 million and $30.0 million available to borrow on the revolving credit facility at  March 31, 2025 and  December 31, 2024, respectively. The decrease in availability is the result of the Rahn acquisition being financed with the revolving credit facility.

Real Property Term Loan

On  May 16, 2024, North 52nd Properties LLC (“North 52nd”), a subsidiary of the Company, purchased certain real property located in Phoenix, Arizona (the “Phoenix Property”) for a purchase price of $6.9 million from Loudermilk, Inc. and its affiliate. The Phoenix Property is utilized by the Company’s subsidiary, CAD, and was previously leased by CAD. The Company exercised its option to purchase the Phoenix Property, which was independently appraised at a value substantially in excess of the purchase price. The purchase of the Phoenix Property included a $1.0 million down payment and was financed with a loan of approximately $5.9 million by MidFirst Bank (“MidFirst”) to North 52nd made pursuant to a Loan Agreement dated   May 16, 2024 by and between North 52nd and MidFirst (the “Loan Agreement”). The loan is secured by the Phoenix Property and guaranteed by the Company and CAD, accrues interest at an annual rate of 7.14%, and is payable in monthly installments until the   May 16, 2034 maturity date. The Loan Agreement provides for customary covenants and events of default, including covenants which require the Company to maintain a fixed charge coverage ratio of not less than 1.2x and a tangible net worth of not less than $10 million, each as of the end of any fiscal year. If the loan is repaid prior to  May 16, 2029, it   may be subject to a prepayment premium as further described in the Loan Agreement. The Company entered into an eighth amendment to the Credit Agreement on   May 16, 2024, which adopted amendments necessary to permit the purchase of the Phoenix Property and the financing of the purchase pursuant to the Loan Agreement.  

The Company was in compliance with all covenants under the Credit Agreement and Loan Agreement at March 31, 2025.