infu20210331

infu20210331_10q.htm

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the quarterly period ended March 31, 2021

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the transition period from to

Commission File Number: 001-35020

INFUSYSTEM HOLDINGS, INC.

(Exact name of registrant as specified in its charter)


Delaware	20-3341405
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

3851 West Hamlin Road

Rochester Hills, Michigan 48309

(Address of Principal Executive Offices)

Registrant’s Telephone Number, including Area Code: (248) 291-1210

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on which Registered
Common Stock, par value $0.0001 per share	INFU	NYSE American LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒	Smaller reporting company ☒

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 3, 2021, 20,468,797 shares of the registrant’s common stock, par value $0.0001 per share, were outstanding.

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INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

Index to Form 10-Q


		PAGE
PART I -	FINANCIAL INFORMATION

Item 1.	Financial Statements	3

	-Unaudited Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020	3
	-Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three months ended March 31, 2021 and 2020	4
	-Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2021 and 2020	5
	-Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020	6
	-Notes to the Unaudited Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24

Item 4.	Controls and Procedures	24

PART II -	OTHER INFORMATION

Item 1.	Legal Proceedings	25

Item 1A.	Risk Factors	25

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25

Item 3.	Defaults Upon Senior Securities	25

Item 4.	Mine Safety Disclosures	25

Item 5.	Other Information	25

Item 6.	Exhibits	26

	Signatures	27

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	As of
	March 31,			December 31,
*(in thousands, except par value and share data)*	2021			2020

ASSETS
Current assets:
Cash and cash equivalents	$	2,761		$	9,648
Accounts receivable, net		14,693			14,720
Inventories		3,229			3,001
Other current assets		2,804			2,402

Total current assets		23,487			29,771
Medical equipment for sale or rental		1,045			1,603
Medical equipment in rental service, net of accumulated depreciation		35,769			35,611
Property & equipment, net of accumulated depreciation		4,327			4,296
Intangible assets, net		11,321			11,177
Operating lease right of use assets		4,376			4,461
Deferred income taxes		10,147			9,967
Other assets		115			105

Total assets	$	90,587		$	96,991

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	6,553		$	6,779
Current portion of long-term debt		671			9,423
Other current liabilities		4,934			6,795

Total current liabilities		12,158			22,997
Long-term debt, net of current portion		31,747			29,378
Operating lease liabilities, net of current portion		3,733			3,864

Total liabilities		47,638			56,239

Stockholders’ equity:
Preferred stock, $.0001 par value: authorized 1,000,000 shares; none issued		-			-
Common stock, $.0001 par value: authorized 200,000,000 shares; issued and outstanding 23,915,091 and 20,396,602, respectively, as of March 31, 2021, and issued and outstanding 23,816,193 and 20,297,704, respectively, as of December 31, 2020		2			2
Additional paid-in capital		86,163			84,785
Accumulated other comprehensive income		158			-
Retained deficit		(43,374	)		(44,035	)

Total stockholders’ equity		42,949			40,752

Total liabilities and stockholders’ equity	$	90,587		$	96,991

See accompanying notes to unaudited condensed consolidated financial statements.

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INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

	Three Months Ended
*(in thousands, except share and per share data)*	March 31,
	2021			2020

Net revenues	$	24,463		$	21,553
Cost of revenues		9,887			8,890
Gross profit		14,576			12,663

Selling, general and administrative expenses:
Provision for doubtful accounts		(70	)		285
Amortization of intangibles		1,043			1,075
Selling and marketing		2,376			2,618
General and administrative		10,354			8,652

Total selling, general and administrative		13,703			12,630

Operating income		873			33
Other expense:
Interest expense		(322	)		(403	)
Other expense		(69	)		(19	)

Income (Loss) before income taxes		482			(389	)
Benefit from (provision for) income taxes		179			(29	)
Net income (loss)	$	661		$	(418	)
Net income (loss) per share:
Basic	$	0.03		$	(0.02	)
Diluted	$	0.03		$	(0.02	)
Weighted average shares outstanding:
Basic		20,338,160			19,918,298
Diluted		21,937,639			19,918,298

Comprehensive income (loss):
Net income (loss)	$	661		$	(418	)
Other comprehensive income:
Unrealized gain on hedges		158			-
Net comprehensive income (loss)	$	819		$	(418	)

See accompanying notes to unaudited condensed consolidated financial statements.

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INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF

STOCKHOLDERS’ EQUITY

(UNAUDITED)

												Accumulated
	Common Stock					Additional						Other		Treasury Stock					Total
				Par Value		Paid in			*Retained*			*Comprehensive*					*Par Value*		*Stockholders*’
*(in* *thousands)*	*Shares*			*Amount*		*Capital*			*Deficit*			*Income*		*Shares*			*Amount*		*Equity*
Balances at December 31, 2019		23,401		$	2	$	83,699		$	(61,367	)	$	-		(3,518	)	$	-	$	22,334
Stock-based shares issued upon vesting - gross		152			-		-			-			-		-			-		-
Stock-based compensation expense		-			-		206			-			-		-			-		206
Employee stock purchase plan		14			-		74			-					-			-		74
Common stock repurchased to satisfy minimum statutory withholding on stock-based compensation		(52	)		-		(426	)		-			-		-			-		(426	)
Common stock issued		28			-		250			-			-		-			-		250
Net loss		-			-		-			(418	)		-		-			-		(418	)
Balances at March 31, 2020		23,543		$	2	$	83,803		$	(61,785	)	$	-		(3,518	)	$	-	$	22,020

Balances at December 31, 2020		23,816		$	2	$	84,785		$	(44,035	)	$	-		(3,518	)	$	-	$	40,752
Stock-based shares issued upon vesting - gross		129			-		139			-			-		-			-		139
Stock-based compensation expense		-			-		1,635			-			-		-			-		1,635
Employee stock purchase plan					-		169			-					-			-		169
Common stock repurchased to satisfy minimum statutory withholding on stock-based compensation		(30	)		-		(565	)		-			-		-			-		(565	)
Other comprehensive income													158							158
Net income		-			-		-			661			-		-			-		661
Balances at March 31, 2021		23,915		$	2	$	86,163		$	(43,374	)	$	158		(3,518	)	$	-	$	42,949

See accompanying notes to unaudited condensed consolidated financial statements.

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INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Three Months Ended
	March 31,
*(in thousands)*	2021			2020

OPERATING ACTIVITIES
Net income (loss)	$	661		$	(418	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Provision for doubtful accounts		(70	)		285
Depreciation		2,527			2,328
Loss on disposal of and reserve adjustments for medical equipment		597			105
Loss (Gain) on sale of medical equipment		89			(1,140	)
Amortization of intangible assets		1,043			1,075
Amortization of deferred debt issuance costs		96			4
Stock-based compensation		1,635			206
Deferred income taxes		(180	)		9
Changes in assets - (Increase)/Decrease:
Accounts receivable		(420	)		(1,628	)
Inventories		(154	)		(1,333	)
Other current assets		(244	)		(340	)
Other assets		(40	)		(19	)
Changes in liabilities - (Decrease)/Increase:
Accounts payable and other liabilities		(2,889	)		1,423
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	2,651		$	557

INVESTING ACTIVITIES
Acquisition of business		(1,204	)		-
Purchase of medical equipment		(2,336	)		(4,007	)
Purchase of property and equipment		(138	)		(529	)
Proceeds from sale of medical equipment, property and equipment		876			500
NET CASH USED IN INVESTING ACTIVITIES		(2,802	)		(4,036	)

FINANCING ACTIVITIES
Principal payments on long-term debt		(40,093	)		(9,229	)
Cash proceeds from long-term debt		34,000			10,468
Debt issuance costs		(386	)		-
Common stock repurchased to satisfy statutory withholding on employee stock-based compensation plans		(565	)		(426	)
Cash proceeds from stock plans		308			74
Common stock - issued		-			250
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES		(6,736	)		1,137

Net change in cash and cash equivalents		(6,887	)		(2,342	)
Cash and cash equivalents, beginning of period		9,648			2,647
Cash and cash equivalents, end of period	$	2,761		$	305

See accompanying notes to unaudited condensed consolidated financial statements.

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INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.	Basis of Presentation, Nature of Operations and Summary of Significant Accounting Policies

The terms “InfuSystem”, the “Company”, “we”, “our” and “us” are used herein to refer to InfuSystem Holdings, Inc. and its subsidiaries. InfuSystem is a leading provider of infusion pumps and related products and services for patients in the home, oncology clinics, ambulatory surgery centers, and other sites of care. The Company provides products and services to hospitals, oncology practices and facilities and other alternative site health care providers. Headquartered in Rochester Hills, Michigan, the Company delivers local, field-based customer support, and also operates pump service and repair Centers of Excellence in Michigan, Kansas, California, Massachusetts, Texas and Ontario, Canada.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and notes required by U.S. Generally Accepted Accounting Principles (“GAAP”) for complete financial statements. The accompanying unaudited condensed consolidated financial statements include all adjustments, composed of normal recurring adjustments, considered necessary by management to fairly state the Company’s results of operations, financial position and cash flows. The operating results for the interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the SEC.

The unaudited condensed consolidated financial statements are prepared in conformity with GAAP, which requires the use of estimates, judgments and assumptions that affect the amounts of assets and liabilities at the reporting date and the amounts of revenue and expenses in the periods presented. The Company believes that the accounting estimates employed are appropriate and the resulting balances are reasonable; however, due to the inherent uncertainties in making estimates, actual results could differ from the original estimates, requiring adjustments to these balances in future periods.

Derivatives Accounting Policy

The Company recognizes all derivative financial instruments as cash flow hedges which are shown as either assets or liabilities on the Company’s consolidated balance sheets at fair value. For derivative contracts which can be classified as a cash flow hedge, the effective portion of the change in fair value of the derivative is recorded to Accumulated Other Comprehensive Income in the consolidated balance sheets. The underlying hedge transaction is realized when the interest payments on debt are accrued, the applicable amount of gain or loss included in Accumulated Other Comprehensive Income is reclassified in earnings in the consolidated statements of income on the same line as the gain or loss on the hedged item attributable to the hedged risk. The cash flows from derivatives are classified as operating activities.

The Company maintains a policy of requiring that all derivative instruments be governed by an International Swaps and Derivatives Association Master Agreement and settle on a net basis.

The fair value of the Company’s derivative financial instruments are categorized as Level 2 of the fair value hierarchy as the values are derived using the market approach based on observable market inputs including quoted prices of similar instruments and interest rate forward curves.

2.	Recent Accounting Pronouncements and Developments

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-13, “Financial Instruments (Topic 326) Credit Losses”. Topic 326 changes the impairment model for most financial assets and certain other instruments. Under the new standard, entities holding financial assets and net investment in leases that are not accounted for at fair value through net income are to be presented at the net amount expected to be collected. An allowance for credit losses will be a valuation account that will be deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. Topic 326 was originally effective as of January 1, 2020, although in November 2019, the FASB delayed the effective date until fiscal years beginning after December 15, 2022 for SEC filers eligible to be smaller reporting companies under the SEC’s definition. The Company qualifies as a smaller reporting company under the SEC’s definition. Early adoption is permitted. The Company is currently evaluating the impact of Topic 326 on its consolidated balance sheets, statements of operations, statements of cash flows and related disclosures.

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3.	Business Combinations

Acquisitions Accounted for Using the Purchase Method

On February 3, 2021 (the “Closing Date”), the Company closed on the acquisition of substantially all of the assets of FilAMed, a privately held biomedical services company based in Bakersfield, California. This acquisition will supplement the Company’s existing biomedical recertification, maintenance and repair services for acute care facilities and other alternate site settings including home care and home infusion providers, skilled nursing facilities, pain centers and others.

FilAMed’s results of operations are included in the Company’s consolidated statements of operations from the Closing Date.

Purchase Price Allocation

Pursuant to FASB Accounting Standards Codification (“ASC”) Topic 805, “Business Combinations,” the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values as of the Closing Date. The purchase price allocation was primarily based upon a valuation using management’s estimates and assumptions. The excess of the purchase price over the net tangible assets was preliminarily recorded as intangible assets. The purchase price allocation was based on a preliminary analysis and is subject to further adjustments. Upon completion of the final purchase price allocation, the Company expects to allocate the excess of the purchase price over the net tangible assets to more specifically defined intangible assets and, if any remaining excess purchase price exists at that time it would be allocated to goodwill. The preliminary allocation of the purchase price to the fair values of the assets acquired and liabilities assumed as of the Closing Date is presented below (in thousands):

	Amount
Property and equipment	$	102
Inventories		74
Medical equipment held for sale or rental		38
Intangible assets		1,186
Total - preliminary purchase price	$	1,400

On the Closing Date, the Company made an initial payment of $1.2 million. As of March 31, 2021, the Company recorded an estimated remaining liability of approximately $0.2 million, which is recorded in the balance sheet under the heading for other current liabilities. As the amounts are immaterial, the unaudited pro forma financial information has not been presented.

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4.	Revenue Recognition

The following table presents the Company’s disaggregated revenue by offering type (in thousands):

	Three Months Ended
	March 31,
	2021					2020
	Total Net Revenues		Percentage of Total Net Revenues			Total Net Revenues		Percentage of Total Net Revenues

Third-Party Payer Rentals	$	12,794		52.3	%	$	11,236		52.1	%
Direct Payer Rentals		8,086		33.1	%		6,859		31.8	%
Product Sales		3,583		14.6	%		3,458		16.1	%

Total	$	24,463		100.0	%	$	21,553		100.0	%

Third-Party Payer Rentals are entirely attributed to revenues of the Integrated Therapy Services (“ITS”) segment. Product Sales are entirely attributed to revenues of the Durable Medical Equipment Services (“DME Services”) segment. For the three months ended March 31, 2021, $3.1 million and $5.0 million of Direct Payer Rentals were attributed to the ITS and DME Services segments, respectively. For the three months ended March 31, 2020, $2.9 million and $4.0 million were attributed to the ITS and DME Services segments, respectively.

5.	Medical Equipment

Medical equipment consisted of the following (in thousands):

	March 31,			December 31,
	2021			2020
Medical Equipment for sale or rental	$	1,107		$	1,636
Medical Equipment for sale or rental - pump reserve		(62	)		(33	)
Medical Equipment for sale or rental - net		1,045			1,603

Medical Equipment in rental service		85,080			83,411
Medical Equipment in rental service - pump reserve		(1,332	)		(893	)
Accumulated depreciation		(47,979	)		(46,907	)
Medical Equipment in rental service - net		35,769			35,611

Total	$	36,814		$	37,214

Depreciation expense for medical equipment for the three months ended March 31, 2021 was $2.3 million, compared to $2.1 million for the same prior year period, which was recorded in “cost of revenues” for each period.

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6.	Property and Equipment

Property and equipment consisted of the following (in thousands):

	March 31, 2021							December 31, 2020
	Gross Assets		Accumulated Depreciation			Total		Gross Assets		Accumulated Depreciation			Total
Furniture, fixtures, and equipment	$	3,989	$	(2,144	)	$	1,845	$	3,742	$	(2,018	)	$	1,724
Automobiles		117		(105	)		12		117		(102	)		15
Leasehold improvements		3,417		(947	)		2,470		3,416		(859	)		2,557

Total	$	7,523	$	(3,196	)	$	4,327	$	7,275	$	(2,979	)	$	4,296

Depreciation expense for property and equipment was $0.2 million for both of the three months ended March 31, 2021 and March 31, 2020. This expense was recorded in “general and administrative expenses” for each period.

7.	Intangible Assets

The carrying amount and accumulated amortization of intangible assets consisted of the following (in thousands):

	March 31, 2021							December 31, 2020
	Gross Assets		Accumulated Amortization			Net		Gross Assets		Accumulated Amortization			Net
Nonamortizable intangible assets
Trade names	$	2,000	$	-		$	2,000	$	2,000	$	-		$	2,000
Amortizable intangible assets:
Trade names		23		(23	)		-		23		(23	)		-
Physician and customer relationships		36,534		(29,518	)		7,016		36,534		(28,924	)		7,610
Software		11,230		(10,083	)		1,147		11,230		(9,663	)		1,567
Acquisition - FilAMed		1,186		(28	)		1,158		-		-			-

Total nonamortizable and amortizable intangible assets	$	50,973	$	(39,652	)	$	11,321	$	49,787	$	(38,610	)	$	11,177

Amortization expense for the three months ended March 31, 2021 was $1.0 million, compared to $1.1 million for the same prior year period, which was recorded in operating expenses. Expected annual amortization expense for the next five years for intangible assets recorded as of March 31, 2021 is as follows (in thousands):

											2026 and
	2021		2022		2023		2024		2025		thereafter		Total

Amortization expense	$	3,043	$	2,221	$	717	$	717	$	537	$	2,086	$	9,321

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”), InfuSystem, Inc. (“ISI”), First Biomedical, Inc. (“First Biomedical”), and IFC LLC (“IFC” and, collectively with the Company, Holdings, ISI and First Biomedical, the “Borrowers”).

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The 2021 Credit Agreement provides for a revolving credit facility (the “Revolving Facility”) of $75 million, maturing on February 5, 2026. The Revolving Facility may be increased by $25 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 million in letters of credit subject to the satisfaction of certain conditions. On February 5, 2021, the Borrowers made an initial borrowing of $30 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”).

Amounts outstanding under the Revolving Facility bear interest at a variable rate equal to, at the Company’s election, a LIBO Rate for Eurodollar loans or an Alternate 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 initial spread under the 2021 Credit Agreement is 2.00% for Eurodollar loans and 1.00% for ABR loans.

The 2021 Credit Agreement has customary representations and warranties, and 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, and 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.

At December 31, 2020, the 2015 Credit Agreement, which would have matured on November 9, 2024, included three term notes totaling $37.9 million, with varying required quarterly amortization payments, and an undrawn $11.8 million revolving line of credit. The availability under the line of credit was reduced by outstanding letters of credit and reserves totaling $1.0 million and was subject to a borrowing base limitation as defined by the agreement. The borrowing base was approximately $15.6 million at December 31, 2020. At December 31, 2020 and on the date of the refinancing, the Company was in compliance with all affirmative and negative covenants, as outlined in the agreement, which included maintenance of a maximum leverage ratio and a minimum fixed charge coverage ratio, as defined in the agreement. Interest on the facility was payable at the Company’s option as a (i) Eurodollar Loan, which bore interest at a per annum rate equal to the applicable 30-day LIBOR plus an applicable margin ranging from 2.00% to 3.00% or (ii) CB Floating Rate (“CBFR”) Loan, which bore interest at a per annum rate equal to the greater of (a) the lender’s prime rate or (b) LIBOR plus 2.50%, in each case, plus a margin ranging from -1.00% to 0.25% based on our leverage ratio. The actual Eurodollar Loan rate at December 31, 2020 was 2.19% (LIBOR of 0.19% plus 2.00%). The actual CBFR Loan rate at December 31, 2020 was 2.25% (lender’s prime rate of 3.25% minus 1.00%).

The 2021 Credit Agreement was accounted for as a debt modification. As of March 31, 2021, 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 is 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, which is being paid off monthly over the term of the lease. The balance of Other Financing as of March 31, 2021 was $0.8 million.

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As referenced above, the Company executed and closed the 2021 Credit Agreement during the first quarter of 2021, and in connection with entering into that agreement, terminated the 2015 Credit Agreement. For the following tables, the figures related to the March 31, 2021 revolving credit facility balances relate to the 2021 Credit Agreement, while the December 31, 2020 revolving credit facility balances relate to the now terminated 2015 Credit Agreement. The following table illustrates the net availability under the revolving credit facilities as of the applicable balance sheet date (in thousands):

	March 31,			December 31,
	2021			2020
Revolving Facility:
Gross availability	$	75,000		$	11,750
Outstanding draws		(32,000	)		-
Letter of credit		(800	)		(800	)
Landlord reserves		-			(162	)
Availability on Revolving Facility	$	42,200		$	10,788

The Company had future maturities of its long-term debt as of March 31, 2021 as follows (in thousands):

	2021		2022		2023		2024		2025 and thereafter		Total
Revolving Facility	$	-	$	-	$	-	$	-	$	32,000	$	32,000
Other financing		551		222		-		-		-		773
Total	$	551	$	222	$	-	$	-	$	32,000	$	32,773

The following is a breakdown of the Company’s current and long-term debt (in thousands):

March 31, 2021							December 31, 2020

	Current Portion		Long-Term Portion		Total			Current Portion		Long-Term Portion		Total
Revolving Facility	$	-	$	32,000		32,000	Revolving Facility	$	-	$	-	$	-
Term Loan		-		-		-	Term Loan		4,615		17,305		21,920
Equipment Line		-		-		-	Equipment Line		1,600		4,400		6,000
2019 Equipment Line		-		-		-	2019 Equipment Line		2,500		7,500		10,000
Other financing		745

SEC Form 10-Q filed by InfuSystems Holdings, Inc.