Annual report pursuant to Section 13 and 15(d)


12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Debt Debt
On February 5, 2021, the Company entered into a Credit Agreement (the 2021 Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent (the “Agent”), sole bookrunner and sole lead arranger, and the lenders party thereto. The borrowers under the 2021 Credit Agreement are the Company, InfuSystem Holdings USA, Inc. (“Holdings”), ISI, First Biomedical, and IFC LLC (“IFC” and, collectively with the Company, Holdings, ISI and First Biomedical, the “Borrowers”).
The 2021 Credit Agreement provides for a revolving credit facility (the “Revolving Facility”) of $75.0 million, maturing on February 5, 2026. The Revolving Facility may be increased by $25.0 million, subject to certain conditions, including the consent of the Agent and obtaining necessary commitments. The lenders under the 2021 Credit Agreement may issue up to $7.0 million in letters of credit subject to the satisfaction of certain conditions. On February 5, 2021, the Borrowers made an initial borrowing of $30.0 million under the Revolving Facility. Proceeds from the loan, along with approximately $8.2 million in cash, were used to repay all amounts due under the Company’s then existing credit facility dated March 23, 2015 (the “2015 Credit Agreement”).
The 2021 Credit Agreement has customary representations and warranties. The ability to borrow under the facility is subject to ongoing compliance with a number of customary affirmative and negative covenants, including limitations on indebtedness, liens, mergers, acquisitions, investments, asset sales, affiliate transactions and restricted payments, as well as financial covenants, including the following:
a minimum fixed charge coverage ratio (defined as the ratio of consolidated EBITDA (as defined in the 2021 Credit Agreement) less 50% of depreciation expense), to consolidated fixed charges (as defined in the 2021 Credit Agreement)) for the prior four most recently ended calendar quarters of 1.20 to 1.00; and
a maximum leverage ratio (defined as total indebtedness to EBITDA for the prior four most recently ended calendar quarters) of 3.50 to 1.00.
The 2021 Credit Agreement includes customary events of default. The occurrence of an event of default will permit the lenders to terminate commitments to lend under the Revolving Facility and accelerate payment of all amounts outstanding thereunder.
Simultaneous with the execution of the 2021 Credit Agreement, the Company entered into a Pledge and Security Agreement to secure repayment of the obligations of the Borrowers. Under the Pledge and Security Agreement, each Borrower has granted to the Agent, for the benefit of various secured parties, a first priority security interest in substantially all of the personal property assets of each of the Borrowers, including the shares of each of Holdings, ISI and First Biomedical and the equity interests of IFC.
On February 5, 2021, in connection with the execution and closing of the 2021 Credit Agreement, the Company, along with its wholly owned subsidiaries as borrowers, terminated the 2015 Credit Agreement. All outstanding loans under the 2015 Credit Agreement have been repaid and all liens under the 2015 Credit Agreement have been released, except that a letter of credit originally issued under the 2015 Credit Agreement in the amount of approximately $0.8 million was transferred to the 2021 Credit Agreement.
The 2021 Credit Agreement was accounted for as a debt modification that resulted in a small increase to deferred debt issuance costs. As of December 31, 2022, the Company was in compliance with all debt-related covenants under the 2021 Credit Agreement.
On April 15, 2019, the Company sold for $2.0 million and immediately leased back certain medical equipment in rental service to a third party specializing in such transactions. The leaseback term was 36 months. Because the arrangement contains a purchase option that the Company is reasonably certain to exercise, this transaction did not qualify for the sale-leaseback accounting under ASC 842. The medical equipment remains recorded on the accompanying condensed consolidated balance sheet and the proceeds received have been classified as an other financing liability. During the fourth quarter of 2021, the Company recorded an additional $0.2 million of interest expense to reflect the amount expected to be paid upon the exercise of the purchase option at the end of its other financing transaction. As of December 31, 2022, all amounts owed under this arrangement had been paid.
The following table illustrates the net availability under the Revolving Facility as of the applicable balance sheet date (in thousands):

December 31, 2022 December 31, 2021
Revolving Facility:
Gross availability $ 75,000  $ 75,000 
Outstanding draws (33,384) (32,974)
Letters of credit (400) (600)
Availability on Revolving Facility $ 41,216  $ 41,426 
The Company had future maturities of its long-term debt as of December 31, 2022 as follows (in thousands):
2023 2024 2025 2026 2027 2028 and
Revolving Facility $ —  $ —  $ —  $ 33,384  $ —  $ —  $ 33,384 
Total $ —  $ —  $ —  $ 33,384  $ —  $ —  $ 33,384 
The following is a breakdown of the Company’s current and long-term debt (in thousands):
December 31, 2022 December 31, 2021
Total Current
Revolving Facility $ —  $ 33,384  $ 33,384  $ —  $ 32,974  $ 32,974 
Other financing —  —  —  423  —  423 
—  33,384  33,384  423  32,974  33,397 
Unamortized value of debt issuance costs —  (227) (227) (74) (226) (300)
Total $ —  $ 33,157  $ 33,157  $ 349  $ 32,748  $ 33,097 
As of December 31, 2022, amounts outstanding under the Revolving Facility provided under the 2021 Credit Agreement bear interest at a variable rate equal to, at the Company’s election, a LIBO Rate for Eurodollar loans or an Alternative Base Rate for ABR loans, as defined by the 2021 Credit Agreement, plus a spread that will vary depending upon the Company’s leverage ratio. The spread ranges from 2.00% to 3.00% for Eurodollar Loans and 1.00% to 2.00% for base rate loans. The weighted-average Eurodollar loan rate at December 31, 2022 was 6.52% (LIBO of 4.27% plus 2.25%). The actual ABR loan rate at December 31, 2022 was 8.75% (lender’s prime rate of 7.50% plus 1.25%).