Bank Indebtedness and Production Facilities
|9 Months Ended
Sep. 30, 2022
|Bank Indebtedness And Production Facilities
|Bank Indebtedness and Production Facilities
Note 14: Bank Indebtedness and Production Facilities
The Company assumed the following bank indebtedness instruments and production facilities as part of the Wow Acquisition.
Revolving Demand Facility
Draws under the $5.0 million CAD revolving demand facility can be made in Canadian or US dollars at the option of the Company by way of bank prime rate loans, Canadian Bankers’ Acceptances, USD LIBOR, or letters of credit and can be repaid at any time without penalty and without notice and are generally repayable on demand. Canadian or US dollar bank prime borrowings bear interest at a rate equal to bank prime plus 2.00% per annum. For other draws under the revolving facility, the respective loans bear interest at a rate equal to Canadian Bankers’ Acceptances or USD LIBOR plus 3.75% per annum. As of September 30, 2022, the Company had an outstanding balance of $2.1 million USD on the revolving demand facility, included as Bank Indebtedness within current liabilities on the Company’s condensed consolidated balance sheet.
As of September 30, 2022, the Company was in compliance with all covenants under the revolving demand facility.
Equipment Lease Line
Each transaction under the $8.0 million CAD equipment lease line has specific financing terms in respect of the leased equipment such as term, finance amount, rate, and payment terms. The finance rates for these equipment leases range from 4%- 4.5% with remaining lease terms of 17-31 months as of the Wow Acquisition date. The Company has recorded right of use assets and lease liabilities for the leased equipment acquired in respect of these draws. The Company has drawn down a total of $7.9 million CAD ($6.0 million USD), with an outstanding balance as of September 30, 2022 of $2.2 million CAD ($1.6 million USD), net of repayments, included within current and noncurrent finance lease liabilities on the Company’s condensed consolidated balance sheet.
Treasury Risk Management Facility
Advances under the treasury risk management facility are subject to market rates as determined by the lender’s treasury department or derivatives group at the time of the drawdown request. The maximum term for foreign exchange forward contracts and interest rate swaps is one year.
As of September 30, 2022, there were no outstanding amounts drawn under the treasury risk management facility.
Interim Financing Facilities
The Company’s interim financing facilities for specific productions bear interest at rates ranging from bank prime plus 1.25% - 1.75% per annum. The interim production financing facilities are generally repayable on demand and are generally secured by a combination of federal and provincial tax credits, other government incentives, production service agreements and license agreements. As of September 30, 2022, the Company had an outstanding balance of $19.3 million USD recorded as Production Facilities, net within current liabilities on the Company’s condensed consolidated balance sheet.