Debt |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Debt | |
| Debt |
Note 11. Debt
Credit and Security Facility
ESS Metron, a wholly-owned subsidiary of the Company, has a $10.0 million Credit and Security Facility, which consists of a $6.0 million Revolving Line of Credit and a $4.0 Equipment Guidance Line.
The $6.0 million Revolving Line of Credit has a term of one year with interest due monthly and principal due at maturity. All amounts borrowed under the Revolving Line of Credit carry a variable interest of not less than 4.0% and are secured by the assets of ESS Metron. As of March 31, 2023, the interest rate was 7.5%.
The $4.0 million Equipment Guidance Line has a term of one year and permits the Company to finance up to 80.0% of certain equipment purchases. All amounts borrowed under the Equipment Guidance Line carry a variable interest of not less than 4.0% and are secured by the assets of ESS Metron. As of March 31, 2023, the interest rate was 7.5%.
Total borrowings under the Credit and Security Facility during the three months ended March 31, 2023, were approximately $0.9 million and payments were $0.5 million. As of March 31, 2023 and December 31, 2022, the outstanding balance was approximately $0.3 million and less than $0.1 million, respectively, and was recognized within Other long-term liabilities on the Condensed Consolidated Balance Sheets.
All borrowings and accrued interest under the Equipment Guidance Line convert to fixed rate term loans every six months, which have either five-year terms for borrowings used to acquire vehicles and manufacturing equipment (“Manufacturing Term Loans”) or three-year terms for borrowings of equipment other than vehicles and manufacturing equipment (“Equipment Term Loans”). The Manufacturing Term Loans carry interest at a fixed rate equal to the five-year treasury rate plus 2.5% as of conversion and the Equipment Term Loans carry interest at a fixed rate equal to the three-year treasury rate plus 2.5% as of conversion. As of March 31, 2023, no amounts were due under Manufacturing Term Loans or Equipment Term Loans.
As of March 31, 2023, the Company was in compliance with all covenants of the Credit and Security Facility. |