Forward-looking statements

This Quarterly Report on Form 10-Q contains or incorporates forward looking
statements within the meaning of the Private Securities Reform Act of 1995,
which involves risks and uncertainties. The following information should be read
in conjunction with the unaudited consolidated financial information and the
notes thereto included in this Quarterly Report on Form 10-Q. You should not
place undue reliance on these forward looking statements. Actual events or
results may differ materially due to competitive factors and other factors
referred to in Part 1A. Risk Factors in our Annual Report on Form 10-K for the
year ended December 31, 2020, our other filings with the Securities and Exchange
Commission and elsewhere in this Quarterly Report. These factors may cause our
actual results to differ materially from any forward looking statement. These
forward looking statements are based on current expectations, estimates,
forecasts, and projections about the industry and markets in which we operate,
and management's beliefs and assumptions. In addition, other written or oral
statements that constitute forward looking statements may be made by us or on
our behalf. Words such as "expect," "anticipate," "intend," "plan," "believe,"
"could," "estimate," "may," "target," "project," or variations of such words and
similar expressions are intended to identify such forward-looking statements.
These statements are not guarantees of future performance and involve risks,
uncertainties, and assumptions that are difficult to predict.

Overview

We manufacture and market semi-finished and finished specialty steel products,
including stainless steel, nickel alloys, tool steel and certain other alloyed
steels. Our manufacturing process involves melting, remelting, heat treating,
hot and cold rolling, forging, machining and cold drawing of semi-finished and
finished specialty steels. Our products are sold to service centers, forgers,
rerollers, and original equipment manufacturers. Our customers further process
our products for use in a variety of industries, including the aerospace, power
generation, oil and gas, heavy equipment and general industrial markets. We also
perform conversion services on materials supplied by customers.

Sales in the third quarter of 2021 were $37.2 million, a decrease of $1.3
million, or 3.5%, from the second quarter. The decrease was primarily due to
supply chain challenges and labor shortages which negatively impacted the timing
of our shipments at the end of the current quarter. Compared to the second
quarter, sales to our aerospace and oil & gas end markets increased, while sales
to our other end markets decreased. Recovery in sales to commercial aerospace is
expected to continue in the fourth quarter of 2021 and in 2022, which is
supported by our recent order entry and growing backlog.

Total Company backlog, before surcharges, at the end of the third quarter was
$125.1 million, an increase of 26.5% over the second quarter level of $98.9
million. This is the third quarter in a row of double-digit sequential growth in
our backlog after a low point at the end of 2020. Inventory was $135.6 million
at the end of the third quarter, representing growth compared to last quarter
and the same period in the prior year. The increase in inventory reflects higher
raw material prices, robust raw material purchases to mitigate supply
disruptions, and increased work in process to support backlog growth.

During the quarter, our sales of premium alloy products, which we define as all
vacuum induction melt products, totaled $5.9 million and comprised 16% of total
sales, up about 1% sequentially. Our premium alloy products are primarily sold
to the aerospace end market.

Our gross margin for the third quarter was $2.3 million, or 6.2% of net sales,
compared to $2.2 million, or 5.6% of net sales, for the second quarter. Gross
margin in the third quarter of 2020 was a loss of $4.4 million, or a negative
11.8% of net sales. The third quarter 2021 gross margin included direct charges
recorded to the Consolidated Statement of Operations as a result of lower
activity levels caused by the COVID-19 pandemic. As lower activity levels at our
production facilities continued, $1.5 million of fixed overhead costs were not
absorbed into inventory and were charged directly to expense during the quarter.

Covid-19 pandemic

While the Company's four plants have continued to operate throughout 2020 and
2021, COVID-19 related challenges negatively impacted the efficiency of our
operations. These challenges are expected to continue in the fourth quarter of
2021 and may continue thereafter. These factors may have additional significant
impacts on the Company's backlog, end markets, overall operations, cash flows
and financial results.

The scope and nature of these impacts, most of which are beyond the Company's
control, continue to evolve, and the outcome is uncertain. The ultimate extent
of the effects of the COVID-19 pandemic on the Company, and the end markets we
serve, remains highly uncertain and will depend on future developments and, as
such, effects could exist for an extended period, even after the pandemic may
end.

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Results of operations

Three months ended September 30, 2021 as compared to the three months ended
September 30, 2020:



                                               Three months ended September 30,
(in thousands, except shipped
ton information)                              2021                          2020

                                                Percentage of                Percentage of    Dollar / ton    Percentage
                                     Amount       net sales       Amount       net sales        variance       variance

Net sales                          $   37,169       100.0 %      $  37,434       100.0 %      $      (265)       (0.7) %
Cost of products sold                  34,862        93.8           41,861       111.8             (6,999)      (16.7)

Gross margin                            2,307         6.2          (4,427)      (11.8)               6,734     (152.1)
Selling, general and
administrative expenses                 5,010        13.5            4,153        11.1                 857        20.6

Operating loss                        (2,703)       (7.3)          (8,580)      (22.9)               5,877        68.5
Interest expense                          483         1.3              586         1.6               (103)      (17.6)
Deferred financing amortization            56         0.2               56         0.1                   -           -
Gain on extinguishment of debt       (10,000)      (26.9)                -           -            (10,000)       100.0
Other expense (income), net                 9           -            (288)       (0.8)                 297     (103.1)

Income (loss) before income
taxes                                   6,749        18.1          (8,934)      (23.8)              15,683       175.5
Income taxes                          (1,141)       (3.1)          (1,934)       (5.2)                 793        41.0

Net income (loss)                  $    7,890        21.2  %     $ (7,000)      (18.6)  %     $     14,890       212.7

Tons shipped                            6,144                        6,046                              98         1.6

Sales dollars per shipped ton      $    6,050                    $   6,192                    $      (142)       (2.3) %






Market Segment Information
                                                 Three months ended September 30,
(in thousands)                                   2021                         2020
                                                   Percentage of               Percentage of     Dollar      Percentage
                                       Amount        net sales       Amount      net sales      variance      variance
Net sales:
Service centers                      $   26,333         70.8  %     $ 25,983        69.4  %     $     350         1.3 %
Original equipment manufacturers          3,336          9.0           4,405        11.8          (1,069)      (24.3)
Rerollers                                 4,722         12.7           3,173         8.5            1,549        48.8
Forgers                                   2,518          6.8           3,451         9.2            (933)      (27.0)
Conversion services and other               260          0.7             422         1.1            (162)      (38.4)

Total net sales                      $   37,169        100.0  %     $ 37,434       100.0  %     $   (265)       (0.7) %


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Melt Type Information
                                               Three months ended September 30,
(in thousands)                                 2021                         2020
                                                 Percentage of               Percentage of     Dollar      Percentage
                                     Amount        net sales        Amount     net sales      variance      variance
Net sales:
Specialty alloys                   $   30,973         83.3  %     $ 27,847        74.4  %     $   3,126        11.2 %
Premium alloys (A)                      5,936         16.0           9,165        24.5          (3,229)      (35.2)
Conversion services and other             260          0.7             422         1.1            (162)      (38.4)

Total net sales                    $   37,169        100.0  %     $ 37,434       100.0  %     $   (265)       (0.7) %



(A) Premium alloys represent all products melted by vacuum induction (VIM).




The majority of our products are sold to service centers rather than the
ultimate end market customers. The end market information in this Quarterly
Report is our estimate based upon our knowledge of our customers and the grade
of material sold to them, which they will in-turn sell to the ultimate end
market customer.



End Market Information
                                                 Three months ended September 30,
(in thousands)                                   2021                         2020
                                                   Percentage of               Percentage of     Dollar      Percentage
                                       Amount        net sales       Amount      net sales      variance      variance
Net sales:
Aerospace                            $   22,253         59.9  %     $ 25,138        67.2  %     $ (2,885)      (11.5) %
Power generation                            847          2.3           1,590         4.2            (743)      (46.7)
Oil & gas                                 4,041         10.9           2,755         7.4            1,286        46.7
Heavy equipment                           7,614         20.5           4,662        12.5            2,952        63.3
General industrial, conversion
services and other                        2,414          6.4           3,289         8.7            (875)      (26.6)

Total net sales                      $   37,169        100.0  %     $ 37,434       100.0  %     $   (265)       (0.7) %






Net sales:

Net sales for the three months ended September 30, 2021 decreases $ 0.3 million, or 0.7%, compared to the same period of the previous year.

Gross margin:

As a percent of net sales, our gross margin for the three months ended September
30, 2021 was 6.2%, compared to negative 11.8% for the three months ended
September 30, 2020. The increase is due to higher production activity and better
absorption, as well as the benefit of operating efficiencies at our facilities
within the cost of products sold during the period and higher surcharges in our
sales price.

Selling, general and administrative expenses:

Our selling, general and administrative ("SG&A") expenses consist primarily of
employee costs, which include salaries, payroll taxes and benefit related costs,
professional services, stock compensation and insurance costs. SG&A expenses
increased by $0.9 million for the three months ended September 30, 2021 compared
to the same period in the prior year. The increase reflects higher salary and
benefit related costs due to increased headcount, an increase in accruals for
incentive compensation, and increased employee relations spending.

Interest charges and other financing costs:

Interest expense totaled approximately $0.5 million in the third quarter of 2021
compared to $0.6 million in the third quarter of 2020. The decrease is primarily
due to the benefit of lower interest rates on our debt, in part due to the
payoff of the North Jackson facility seller notes in 2021.

Income taxes:

Management estimates the annual effective income tax rate quarterly, based on
current annual forecasted results. Items unrelated to current year ordinary
income are recognized entirely in the period identified as a discrete item of
tax. The quarterly income tax provision includes tax on ordinary income provided
at the most recent estimated annual effective tax rate ("ETR"), increased or
decreased for the tax effect of discrete items.

Our estimated annual effective tax rate applied to ordinary income at September
30, 2021 was 136.9%. The difference between the statutory rate and the projected
annual ETR is primarily due to the non-taxable gain on extinguishment of debt
recorded based on forgiveness of the PPP loan, as well

                                       15

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as research and development credits. Our ETR for the third quarter of 2021 was
negative 16.9% due to the impact of the non-taxable gain on extinguishment of
debt.

Our estimated annual ETR applied to ordinary income at September 30, 2020 was
23.7%. The difference between the statutory rate and the projected annual ETR is
primarily due to research and development credits. Our ETR for the third quarter
of 2020 was 21.6%, which is lower than the projected annual ETR primarily due to
discrete expense for the expiration of stock options.

Net income (net loss):

For the three months ended September 30, 2021, the Company recorded net income
of $7.9 million, or $0.87 per diluted share, compared to a net loss of $7.0
million, or $0.79 per diluted share, for the three months ended September 30,
2020.



Nine months ended September 30, 2021 as compared to the nine months ended
September 30, 2020:



                                                          Nine months ended September 30,
(in thousands, except shipped ton
information)                                        2021                                  2020

                                                      Percentage of net                     Percentage of net     Dollar / ton          Percentage
                                       Amount               sales            Amount               sales             variance             variance
Total net sales                      $   112,709           100.0     %     $   148,407           100.0     %     $       (35,698 )        (24.1 )   %
Cost of products sold                    108,486            96.3               145,988            98.4                   (37,502 )        (25.7 )

Gross margin                               4,223             3.7                 2,419             1.6                     1,804           74.6
Selling, general and
administrative expenses                   15,392            13.7                15,458            10.4                       (66 )         (0.4 )

Operating loss                           (11,169 )         (10.0 )             (13,039 )          (8.8 )                   1,870          (14.3 )
Interest expense                           1,413             1.3                 2,232             1.5                      (819 )        (36.7 )
Deferred financing amortization              168             0.1                   169             0.1                        (1 )         (0.6 )
Gain on extinguishment of debt           (10,000 )          (8.9 )                   -               -                   (10,000 )        100.0
Other expense (income), net                   32               -                  (302 )          (0.2 )                     334         (110.6 )

Profit (loss) before tax (2,782) (2.5)

   (15,138 )         (10.2 )                  12,356          (81.6 )
Income taxes                              (3,650 )          (3.2 )              (3,396 )          (2.3 )                    (254 )          7.5

Net income (loss)                    $       868             0.7      %    $   (11,742 )          (7.9 )    %    $        12,610          107.4

Tons shipped                              20,460                                25,153                                    (4,693 )        (18.7 )

Sales dollars per shipped ton        $     5,509                           $     5,900                           $          (391 )         (6.6 )   %





Market segment information

                                                           Nine months ended September 30,
(in thousands)                                       2021                                  2020
                                                       Percentage of net                     Percentage of net       Dollar
                                        Amount               sales            Amount               sales            variance       Percentage variance
Net sales:
Service centers                       $    80,185            71.1     %     $   103,877            70.0     %     $   (23,692 )              (22.8 )   %
Original equipment manufacturers           10,916             9.7                16,624            11.2                (5,708 )              (34.3 )
Rerollers                                  13,629            12.1                13,612             9.2                    17                  0.1
Forgers                                     7,012             6.2                12,027             8.1                (5,015 )              (41.7 )
Conversion services and other sales           967             0.9                 2,267             1.5                (1,300 )              (57.3 )

Total net sales                       $   112,709           100.0      %    $   148,407           100.0      %    $   (35,698 )              (24.1 )   %








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Melt Type Information
                                                           Nine months ended September 30,
(in thousands)                                       2021                                  2020

                                                       Percentage of net                     Percentage of net       Dollar
                                        Amount               sales             Amount              sales            variance       Percentage variance
Net sales:
Specialty alloys                      $    92,359            81.9     %     $   116,869            78.7     %     $   (24,510 )              (21.0 )   %
Premium alloys (A)                         19,383            17.2                29,271            19.7                (9,888 )              (33.8 )
Conversion services and other sales           967             0.9                 2,267             1.6                (1,300 )              (57.3 )

Total net sales                       $   112,709           100.0     %     $   148,407           100.0     %     $   (35,698 )              (24.1 )   %

(A) Premium alloys represent all products melted by vacuum induction (VIM).

The majority of our products are sold to service centers rather than end market customers. The end-market information contained in this quarterly report is our estimate based on our knowledge of our customers and the quality of the materials sold to them, which they will in turn sell to the end-market end customer.



End Market Information
                                                         Nine months ended September 30,
(in thousands)                                     2021                                  2020
                                                     Percentage of net                     Percentage of net       Dollar
                                      Amount               sales            Amount               sales            variance       Percentage variance
Net sales:
Aerospace                           $    65,798            58.4     %     $   104,686            70.5     %     $   (38,888 )              (37.1 )   %
Power generation                          3,453             3.1                 5,923             4.0                (2,470 )              (41.7 )
Oil & gas                                11,045             9.8                10,778             7.3                   267                  2.5
Heavy equipment                          24,967            22.2                16,364            11.0                 8,603                 52.6
General industrial, conversion
services and other sales                  7,446             6.5                10,656             7.2                (3,210 )              (30.1 )

Total net sales                     $   112,709           100.0     %     $   148,407           100.0     %     $   (35,698 )              (24.1 )   %




Net sales:

Net sales for the nine months ended September 30, 2021 decreased $35.7 million,
or 24.1%, compared to the nine months ended September 30, 2020. This reflects
decreases in consolidated shipment volume of 18.7% and average sales dollar per
shipped ton of 6.6%. The decrease in volume was caused by the economic impact of
the COVID-19 pandemic on our customers and end markets, and ultimately our order
levels for delivery in 2021. The decrease in sales dollars per shipped ton is
due to the lower mix of aerospace and premium alloy products as a percent of
sales, which was also driven by the overall economic impact of the pandemic on
the end markets we serve.

Gross margin:

Our gross margin, as a percentage of sales, was 3.7% for the nine months ended
September 30, 2021 against 1.6% for the nine months ended September 30, 2020. The increase is mainly the result of a decrease in direct charges associated with lower activity levels due to the economic downturn, as well as the advantage of the operational efficiency of our facilities in the cost of goods sold during of the period and higher surcharges in our selling price.

Selling, general and administrative expenses:

Our SG&A expenses consist primarily of employee costs, which include salaries,
payroll taxes and benefit related costs, professional services, stock
compensation and insurance costs. SG&A expenses were approximately flat for the
nine months ended September 30, 2021 compared to the same period in the prior
year.

Interest charges and other financing costs:

Interest expense totaled approximately $1.4 million in the first nine months of
2021 compared to $2.2 million in the first nine months of 2020. The decrease
reflects the benefit of lower interest rates as well as lower overall average
debt levels.

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Income taxes:

Management estimates the annual effective income tax rate quarterly, based on
current annual forecasted results. Items unrelated to current year ordinary
income are recognized entirely in the period identified as a discrete item of
tax. The quarterly income tax provision includes tax on ordinary income provided
at the most recent estimated annual ETR, increased or decreased for the tax
effect of discrete items.

For the nine months ended September 30, 2021 and 2020, our estimated annual ETR
applied to ordinary income were 136.9% and 23.7%, respectively. The difference
between the federal statutory rate of 21.0% and the projected annual ETR is
primarily due to the non-taxable gain on extinguishment of debt recorded based
on forgiveness of the PPP loan, as well as research and development credits.

Discrete items during the nine months ended September 30, 2021 and 2020 were not
significant and were primarily related to expense recorded upon the expiration
of stock options, and our ETR for the first nine months of each year was 131.2%
and 22.4%, respectively.

Net income (loss):

For the nine months ended September 30, 2021, the Company recorded net income of
$0.9 million, or $0.10 per diluted share, compared to a net loss of $11.7
million, or $1.33 per diluted share, for the nine months ended September 30,
2020.


Liquidity and capital resources

Historically, we have financed our operations through cash provided by operating
activities and borrowings on our credit facilities. At September 30, 2021, we
maintained approximately $39 million of remaining availability under our
revolving credit facility.

We believe that our cash flows from continuing operations, as well as available
borrowings under our credit facility are adequate to satisfy our working
capital, capital expenditure requirements, and other contractual obligations for
the foreseeable future, including at least the next 12 months.

On April 16, 2020, the Company entered into a promissory note, dated April 15,
2020, with PNC Bank, National Association ("PNC Bank"), evidencing an unsecured
loan with a principal amount of $10.0 million made to the Company pursuant to
the Paycheck Protection Program (the "PPP Term Note") under the Coronavirus Aid,
Relief, and Economic Security Act. The PPP Term Note was guaranteed by the
United States Small Business Administration. The Company did not make any
principal or interest payments related to the PPP Term Note.

The Company requested the delivery of the PPP Term Note during the third quarter of 2020. As of July 2021, PNC Bank has informed the Company that the delivery of the note has been granted by the United States Small Business Administration. As a result, the PPP Term Note was canceled in its entirety, including all accrued interest thereon. In the third quarter of 2021, we recorded a discount on the PPP term note and recorded a corresponding gain on the extinguishment of debt in the consolidated statement of income for the period.

Net cash (used) provided by operating activities:

During the nine months ended September 30, 2021, net cash of $4.9 million was
used in operating activities. Our net income, after adjustments for non-cash
expenses, generated $2.5 million. We used $12.3 million of cash for managed
working capital, which we define as net accounts receivable, plus inventory,
minus accounts payable, minus other current liabilities. Accounts receivable
increased due to higher sales in the 2021 third quarter compared to the 2020
fourth quarter, while inventory increased $25.5 million. The increase in
inventory reflects higher raw material prices, robust raw material purchases to
mitigate supply disruptions, and increased work in process to support backlog
growth. Accounts payable increased $16.5 million, in line with the increased
production activity compared to the end of 2020, and other current liabilities
decreased $1.7 million. We also generated $3.2 million of cash from all other
operating activities.

During the nine months ended September 30, 2020, net cash provided by operating
activities was $12.6 million. Our net loss, after adjustments for non-cash
expenses, generated $0.7 million. We generated $9.4 million of cash from managed
working capital, which we define as net accounts receivable, plus inventory,
minus accounts payable, minus other current liabilities. Accounts receivable
decreased due to lower sales, and both inventory and accounts payable decreased
due to lower melt activity levels and lower purchasing related to strategic
spend reduction initiatives. Other current liabilities increased by $0.8
million. In addition, we generated $2.5 million of cash from other assets and
liabilities, primarily due to cash received from insurance claims.

Net cash used in investing activities:

During the nine months ended September 30, 2021, we used $6.5 million of cash
for capital expenditures, compared to $8.5 million for the same period in the
prior year. Approximately half of the current year to date total is related to
strategic projects to expand our melt and remelt capabilities related to premium
products. These projects are scheduled for completion before the end of 2021,
and total capital spending for 2021 is expected to approximate $11.0 million.

Net cash provided by (used in) fundraising activities:

Net cash provided by financing activities was $11.3 million for the nine months
ended September 30, 2021, compared to a use of $4.2 million for the same period
in the prior year. The increase was due to additional cash drawn on our
revolving credit facility to fund working capital growth.

Financing activities included the impacts of amending our credit agreement in
the first quarter of 2021, which primarily includes proceeds of $8.6 million
received from increasing our term loan principal balance to $15.0 million. The
proceeds from the Term Loan (as defined below) and borrowings under our
Revolving Credit Facility (as defined below) were used to pay the $15.0 million
in notes that matured during the first quarter.

Net cash used in financing activities was $4.2 million for the nine months ended
September 30, 2020. This includes the proceeds from our $10.0 million PPP Term
Note (as defined above) received during the second quarter.

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Raw materials

The cost of raw materials represents approximately 35% to 40% of the cost of
products sold in the first nine months of 2021 and 2020. The major raw materials
used in our operations include nickel, molybdenum, vanadium, chrome, iron and
carbon scrap. Additionally, our Bridgeville facility uses graphite electrodes as
a consumable supply in the melting process. We maintain a surcharge within our
sales price to mitigate the risk of substantial raw material cost fluctuations.
The market values for these raw materials and others continue to fluctuate based
on supply and demand, market disruptions and other factors. Over time, our
surcharge will effectively offset changes in raw material costs; however, during
a period of rising or falling prices the timing will cause variation between
reporting periods.

Credit Facility

On March 17, 2021, we entered into the Second Amended and Restated Revolving
Credit, Term Loan and Security Agreement (the "Credit Agreement"), with PNC
Bank, National Association, as administrative agent and co-collateral agent,
Bank of America, N.A., as co-collateral agent, the Lenders (as defined in the
Credit Agreement) party thereto from time to time and PNC Capital Markets LLC,
as sole lead arranger and sole bookrunner. The Credit Agreement replaces our
prior credit agreement, and provides for a senior secured revolving credit
facility in an aggregate principal amount not to exceed $105.0 million
("Revolving Credit Facility") and a senior secured term loan facility ("Term
Loan") in the amount of $15.0 million (together with the Revolving Credit
Facility, the "Facilities").

The Company was in compliance with all financial covenants applicable on the date we entered into the credit agreement and through September 30, 2021.

The facilities, which expire on March 17, 2026 (the “Expiry Date”), are secured by a first lien on substantially all of the assets of the Company and its subsidiaries, except that no real property is guaranteed under the Facilities other than real property. of the Company in North Jackson, Ohio.

Availability under the Credit Agreement is based on eligible accounts receivable
and inventory. The Company must maintain undrawn availability under the Credit
Agreement of at least $11.0 million. That requirement can be overcome if the
Company maintains a fixed charge coverage ratio of not less than 1.10 to 1.0
measured on a rolling two quarter basis and calculated in accordance with the
terms of the Credit Agreement.

The Company is required to pay a commitment fee of 0.25% based on the unused daily portion of the revolving credit facility.

With respect to the Term Loan, the Company pays quarterly installments of the
principal of approximately $0.5 million, plus accrued and unpaid interest, on
the first day of each fiscal quarter beginning after June 30, 2021. To the
extent not previously paid, the Term Loan will become due and payable in full on
the Expiration Date.

Amounts outstanding under the Facilities, at the Company's option, bear interest
at either a base rate or a LIBOR based rate, in either case calculated in
accordance with the terms of the Credit Agreement. Interest under the Credit
Agreement is payable monthly. We elected to use the LIBOR based rate for the
majority of the debt outstanding under the Facilities for the three months ended
September 30, 2021, which was approximately 2.60% on our Revolving Credit
Facility and 3.10% for the Term Loan.

We incurred $0.5 million in additional financing costs in conjunction with the
execution of the Credit Agreement, which were recorded to the consolidated
balance sheet in the first quarter of 2021 and will be amortized to interest
expense over the life of the Credit Agreement. At September 30, 2021, we had
total Credit Agreement related net deferred financing costs of approximately
$0.9 million. For the nine months ended September 30, 2021, we amortized $0.1
million of those deferred financing costs.

Remarks

As part of the acquisition of the North Jackson installation in August 2011, we issued $ 20.0 million as a total principal of tickets to sellers of North Jackson facility as partial consideration for the acquisition.

On January 21, 2016, the Company entered into Amended and Restated Notes in the
aggregate principal amount of $20.0 million (the "Notes"), each in favor of
Gorbert Inc. ("Holder"). The Company's obligations under the Notes were
collateralized by a second lien on the same assets of the Company that
collateralize the obligations of the Company under the Facilities. The Holder
had the right to elect at any time on or prior to August 17, 2017 to convert all
or any portion of the outstanding principal amount of the Notes.

The Notes were originally scheduled to mature on March 17, 2019. In 2019, the
Company extended the maturity date to March 17, 2020 in accordance with the
terms of the Notes. In 2020, the Company extended the maturity date to March 17,
2021 in accordance with the terms of the Notes. The Company made partial
principal payments on the notes upon extension, and an aggregate principal
amount of $15.0 million remained outstanding at the 2021 maturity date. On March
17, 2021, the Company paid the remaining principal balance and all applicable
interest to settle the notes obligation.

The Notes had an applicable interest at a rate of 6.0% per year from August 17,
2017 until the time they were paid off. All accrued and unpaid interest was
payable quarterly in arrears on September 18, December 18, March 18 and June 18
of each year.

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Leases

The Company periodically enters into leases in its normal course of business.
Operating lease liabilities and right-of-use assets are recorded to the
consolidated balance sheet at the present value of minimum lease payments. The
assets are included in Other long-term assets in the consolidated balance sheets
and are amortized over the respective terms, which are five years or less. The
long-term component of the lease liability is recorded in Other long-term
liabilities, net and the current component is included in Other current
liabilities.

The right-of-use assets and lease liabilities for finance leases are recorded at
the present value of minimum lease payments. The assets are included in
Property, plant and equipment, net on the consolidated balance sheets and are
depreciated over the respective lease terms. The long-term component of the
lease liability is included in Long-term debt and the current component is
included in Current portion of long-term debt.

The Company entered into one new agreement accounted for as an operating lease
during the first quarter of 2021 and did not enter into any new agreements
accounted for as an operating or finance lease agreements during the second or
third quarters.

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