| 8. Notes Payable and Long-Term Debt | Notes payable
and long-term debt consisted of the following for the periods indicated (in thousands):
September
30, 2015 December
31, 2014
Revolving line of credit with a U.S. bank up to $25,000
with interest at LIBOR plus 2.75% or 3%, maturing June 30, 2018 20,000 15,000
Term loan with a U.S. bank with monthly payments of principal and
interest at LIBOR plus 2.75%, maturing July 31, 2019 4,340 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 2,751 –
Revolving line of credit with a Taiwan bank up to $7,000 with interest
at Taiwan deposit index plus 0.41% or LIBOR plus 1.7% maturing on February 6, 2016 3,543 3,605
Revolving line of credit with a Taiwan bank up to $4,000 with interest
at Taiwan Time Deposit Interest Rate Index plus 1% or LIBOR plus 1% maturing on December 11, 2015 3,396 3,536
Revolving line of credit with the Taiwan branch of a China bank
up to $6,000 with interest at LIBOR plus 1.5% or Taiwan Interbank Offered Rate plus 0.9% , maturing April 1, 2016 5,559 –
Note payable to a finance company due in monthly installments with
4.95% interest, maturing July 30, 2015 – 443
Note payable to a finance company due in monthly installments with
4.5% interest, maturing June 30, 2018 5,328 –
Revolving line of credit with a China bank up to $5,000 with interest
of 3.15%, which mature between October and December 2015 2,105 1,064
Revolving line of credit with a China bank
up to $2,205 with interest at 108% of China Prime rate, ranging between 4.8% and 5.79%, maturing from March 2016 to August
2016 207 –
Total 49,229 28,648
Less current portion (20,793 ) (9,591 )
Non-current portion $ 28,436 $ 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 November 2015 to March 2016 3,109 1,271 The current portion
of long-term debt is the amount payable within one year of the balance sheet date of September 30, 2015. The one-month LIBOR rate
was 0.1994% on September 30, 2015. Maturities of
long-term debt are as follows for the future one-year periods ending September 30 (in thousands):
2016 $ 20,793
2017 3,607
2018 23,011
2019 1,443
2020 thereafter 375
Total outstanding $ 49,229 On June 30, 2015,
the Company entered into a credit agreement with East West Bank and Comerica Bank, 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 September 30, 2015, $20.0 million was outstanding under the
revolving line of credit and $2.0 million was outstanding under the term loans. We also have with
East West Bank a term loan of $5 million with monthly payments of principal and interest that matures on July 31, 2019. As of
September 30, 2015, the outstanding balance of such term loan was $4.3 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 September
30, 2015, there were no amounts outstanding under this loan agreement and there was a balance of $1.0 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 September 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, 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 September 30, 2015,
$2.8 million was outstanding under this credit facility. On March 9, 2015,
the CompanyÂ’s Taiwan branch increased its $4.0 million credit facility to a $7.0 million revolving credit facility 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 0.41% 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 September 30, 2015, $3.5 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 September 30, 2015,
$3.4 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 $6 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 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 September 30, 2015, $5.6 million was outstanding under this credit facility. On July 30, 2015,
the CompanyÂ’s Taiwan branch fully repaid its note payable with a financing company. 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 September 30, 2015, $5.3 million was outstanding under this finance lease agreement. As of September
30, 2015, the CompanyÂ’s China subsidiary had credit facilities with China Construction Bank totaling $16.3 million, which
can be drawn in U.S. currency, RMB currency, issuing bank acceptance notes to vendors with different interest rates or issuing
standby letters of credit. As of September 30, 2015, the CompanyÂ’s China subsidiary used $6 million of its credit facility
and issued standby letters of credit as collateral for the CompanyÂ’s Taiwan branch line of credit with China Construction
Bank. As of September 30, 2015, the Company had a U.S. currency based loan of $2.1 million outstanding under various notes with
three-month terms, maturing from October 2015 to December 2015 with effective interest rate of 3.15%. There was $0.2 million outstanding
RMB currency cash loan as of September 30, 2015, with a maturity date of August 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 $3.1 million with zero interest
rate as of September 30, 2015. As of September
30, 2015, the Company had $43.1 million of unused borrowing capacity. As of September
30, 2015, there was $11.8 million of restricted cash, investments or security deposit associated with the loan facilities. |
