| 8. Notes Payable and Long-Term Debt | Notes payable
and long-term debt consisted of the following for the periods indicated (in thousands):
June
30, 2015 December
31, 2014
Revolving line of credit with a U.S. bank up to $20,000
with interest at LIBOR plus 2.75%, maturing June 30, 2018 20,000 15,000
Revolving line of credit with a U.S. bank up to $5,000 with interest
at LIBOR plus 3.0%, due every 90 days, maturing June 30, 2018 5,000 –
Term loan with a U.S. bank with monthly payments of principal and
interest at LIBOR plus 2.75%, maturing July 31, 2019 4,623 5,000
Term loan with a U.S. bank with monthly payments of principal and
interest at LIBOR plus 2.75%, maturing June 30, 2020 2,000 –
Revolving line of credit with a Taiwan bank up to $3,000 with interest
based on the bank's corporate interest rate index+ 1.5%, or 2.40% maturing on November 15, 2015 2,296 –
Revolving line of credit with a Taiwan bank up to $7,000 with interest
at Taiwan deposit index plus 0.38% or LIBOR plus 1.7% maturing on February 6, 2016 5,908 3,605
Revolving line of credit with a Taiwan bank up to $4,000 with interest
at Taiwan Time Deposit Interest Rate Index plus 0.41% or LIBOR plus 1.28% maturing on December 11, 2015 3,624 3,536
Revolving line of credit with a China bank up to $5,000 with interest
ranged from 2.15% to 3.15%, which mature between July and September 2015 4,014 1,064
Revolving line of credit with a China bank up to $4,432 with interest
at 108% of China Prime rate, or 5.79%, maturing April 17, 2016 3,926 –
Revolving line of credit with the Taiwan branch of a China bank
up to $3,000 with interest at LIBOR plus 1.5% or Taiwan Interbank Offered Rate plus 0.9% , maturing April 1, 2016 2,917 –
Note payable to a finance company due in monthly installments with
4.95% interest, maturing July 30, 2015 65 443
Note payable to a finance company due in monthly
installments with 4.5% interest, maturing from May 27, 2018 to June 30, 2018 6,213 –
Total 60,586 28,648
Less current portion (30,990 ) (9,591 )
Long term portion $ 29,596 $ 19,057
Bank
Acceptance Notes Payable
Bank acceptance notes issued to vendors with a zero percent interest
rate, a 30% guarantee deposit of $797, and maturity dates ranging from July 2015 to December 2015 2,660 1,271 The current portion
of long-term debt is the amount payable within one year of the balance sheet date of June 30, 2015. The one-month LIBOR rate was
0.186% on June 30, 2015. Maturities of
long-term debt are as follows for the future one-year periods ending June 30 (in thousands):
2016 $30,990
2017 3,739
2018 23,631
2019 thereafter 2,226
Total outstanding $60,586 On June 30, 2015,
the Company entered into with East West Bank and Comerica Bank a credit agreement, a second lien deed of trust, multiple security
agreements and promissory notes evidencing two credit facilities and a term loan. The credit agreement included a $25.0 million
revolving line of credit which matures on June 30, 2018 and a $10 million term loan maturing on June 30, 2020. The interest rate
on these loans is the LIBOR Borrowing Rate plus 2.75% or 3.0%. As of June 30, 2015, $25.0 million was outstanding under the revolving
line of credit and $2.0 million was outstanding under the term loans. Also with East
West Bank was a term loan of $5 million with monthly payments of principal and interest that matures on July 31, 2019. As of June
30, 2015, the outstanding balance of such term loan was $4.6 million. On January 26, 2015, the Company entered into a construction
loan agreement with East West Bank for up to $22.0 million dollars to finance the construction of its campus expansion plan in
Sugar Land, Texas. Upon signing the agreement, the Company deposited $11.0 million into a restricted bank account for ownerÂ’s
contribution of construction costs. The loan will have a fifteen month draw down period with monthly interest payments commencing
on February 26, 2015 and ending April 26, 2016. Thereafter, the entire outstanding principal balance shall be converted to a sixty-nine
month term loan with principal and interest payments due monthly amortized over three hundred months. The first principal and
interest payment is due on May 26, 2016 and will continue the same day of each month thereafter. The final principal and interest
payment is due on January 26, 2022 and will include all unpaid principal and all accrued and unpaid interest. The Company may
pay without penalty all or a portion of the amount owed earlier than due. Under the loan agreement, the loan bears interest, at
an annual rate based on the one-month LIBOR Borrowing Rate plus 2.75%. As of June 30, 2015, there were no amounts outstanding
under this loan agreement and there was a balance of $5.1 million in the restricted bank account. The loan and security
agreements with East West Bank and Comerica Bank require the Company to maintain certain financial covenants, including a minimum
current ratio and minimum annual EBITDA. As of June 30, 2015, the Company was in compliance with all covenants contained in these
agreements. On January 6,
2015, the CompanyÂ’s Taiwan branch entered into a Credit Facility with CTBC Bank Co. Ltd. in Taipei, Taiwan for 90.0 million
New Taiwan dollar ($3.0 million USD), one year revolving credit facility. Its obligations under the Credit Facility are unsecured.
Borrowings under the Credit Facility will bear interest at a rate based on the BankÂ’s corporate interest rate index plus
1.5%, adjusted monthly. As of the execution of the Credit Facility the BankÂ’s corporate interest rate index is 0.91%. As
of June 30, 2015, $2.3 million was outstanding under this credit facility. On March 9, 2015,
the CompanyÂ’s Taiwan branch increased its $4.0 million, to a $7.0 million revolving credit facility agreement, with E. Sun
Commercial Bank. Its obligations under the credit facility are secured by our $4.0 million cash deposit in a one-year CD with
such bank and mature on May 27, 2016. The $4.0 million revolving line of credit with CD security bears interest at a rate equal
to Taiwan Deposit Index Rate plus 0.38% for New Taiwan dollar borrowings and a 0.1% service fee for U.S. dollar borrowings. The
additional $3.0 million credit facility bears interest at a rate equal to LIBOR plus 1.7% divided by 0.946 and a 0.5% service
fee for U.S. dollar borrowings. As of June 30, 2015, $5.9 million was outstanding under this credit facility. On March 25, 2015,
the CompanyÂ’s Taiwan branch renewed its $4.0 million, one year revolving credit facility agreement, originally dated December
31, 2013, with Mega International Commercial Bank. Obligations under the credit facility are secured by a $4.0 million cash deposit
in a CD with such bank. Borrowings under this credit facility will bear interest at a rate not less than the LIBOR borrowing rate
plus 1.0%, divided by 0.946 for U.S. and other currency borrowings, New Taiwan dollar borrowings interest will bear at a rate
equal to the BankÂ’s base lending rate plus 0.76%. The current effective interest rate is 1.77%. As of June 30, 2015, $3.6
million was outstanding under this credit facility. On April 1, 2015,
the CompanyÂ’s Taiwan branch entered into a comprehensive credit line agreement with the Taipei branch of China Construction
Bank, providing a revolving credit line of $3 million, maturing on April 1, 2016. Borrowings under the credit line agreement are
secured by a standby letter of credit issued by the China branch of the bank under existing agreements between the bank and our
China subsidiary. Borrowings under the credit line agreement reduce the amounts available under of the existing credit line between
the bank and the CompanyÂ’s China subsidiary and cannot exceed 97% of the amount of the standby letter of credit issued by
the China branch of the bank. Borrowings under the credit line agreement will bear interest at a rate not less than LIBOR plus
1.5% for US dollar borrowings and at a rate of not less than Taiwan Interbank Offered Rate plus 0.9% for New Taiwan dollar borrowings.
As of June 30, 2015, $2.9 million was outstanding under this credit facility. The CompanyÂ’s
Taiwan branch had an outstanding note payable balance of $0.1 million with a financing company that matures on July 30, 2015. On June 30, 2015,
the CompanyÂ’s Taiwan branch entered into a purchase and sale contract and a finance lease agreement together with the sale
contract with Chailease Finance Co, Ltd. in connection with certain equipment, structured as a sale lease-back transaction. Pursuant
to the sale contract, the Company sold certain equipment to Chailease and simultaneously leased the equipment back from Chailease
pursuant to the finance lease agreement. The finance lease agreement has a three year term, with monthly lease payments, maturing
on May 27 and June 30, 2018 respectively. The title to the equipment will be transferred to the Company upon the expiration of
the finance lease agreement. As of June 30, 2015, $6.2 million was outstanding under this finance lease agreement. As of June 30,
2015, the CompanyÂ’s China subsidiary had credit facilities with China Construction Bank totaling $12.1 million, which can
be drawn in U.S. currency, RMB currency or issuing bank acceptance notes to vendors with different interest rates. As of June
30, 2015, the Company had a U.S. currency based loan of $4.0 million outstanding under various notes with three-month terms, maturing
from July 2015 to September 2015 with effective interest rate of 3.15%. There was $3.9 million outstanding RMB currency cash loan
as of June 30, 2015, with a maturity date of April 26, 2016. The effective interest rate for the RMB currency loan was 5.79%.
The outstanding balance of bank acceptance notes issued to vendors was $2.7 million with zero interest rate as of June 30, 2015. As of June 30,
2015, the Company had $41.1 million of unused borrowing capacity. |
