Note

Debt

The Company has a credit agreement with Amegy Bank which provides a

$4.0

million revolving line of credit and previously provided up to a

$3.0

million term loan which could be drawn through

October 24, 2016.

Amounts outstanding under the term loan reduce the availability under the revolving line of credit. The revolving line of credit is also subject to a borrowing base derived from

80%

of eligible accounts receivable (as defined) and the Company's minimum net worth covenant. The revolving line of credit bears interest at prime plus

0.50%

payable monthly. As of

December 31, 2020,

the Company had a

$0.2

million irrevocable standby letter of credit outstanding under the revolving line of credit and had additional borrowing capacity of

$1.7

million. The revolving line of credit presently expires

October 24, 2022.

August 16, 2016,

the Company drew

$2.7

million of the term loan and used the proceeds to fund the purchase of shares of its common stock in a private transaction. The term loan bore interest at

4.5%

per annum and was payable in monthly payments of interest only until

November, 2016,

followed by

equal monthly payments of principal and interest computed on a

-month amortization schedule. A final

$0.6

million payment of principal and interest was paid on

October 28, 2020.

July 16, 2018,

the Company amended its credit agreement with Amegy Bank to provide for an additional term loan of up to

$1.0

million that could be drawn by the Company through

July 12, 2019,

for the purpose of repurchases of its common stock. The additional term loan is evidenced by a promissory note bearing interest at

5.15%

per annum and was payable in monthly installments of interest only through

July 12, 2019.

Thereafter, the note is payable in monthly installments sufficient to fully amortize the outstanding principal balance in

months with the balance of principal and accrued interest due on

July 12, 2023.

Amounts outstanding under the additional term loan reduce the availability under the Company's revolving line of credit with Amegy Bank. On

August 1, 2018,

the Company drew

$0.7

million of the additional term loan and used the proceeds to fund the purchase of

100,000

shares of its common stock in a private transaction. On

December 12, 2018,

the Company drew

$0.3

million of the additional term loan and used the proceeds to partially fund a purchase of

50,000

shares of its common stock in a private transaction. As of

December 31, 2020,

a total of

$0.7

million was outstanding on the term loan.

Reduced outstanding accounts receivable available as collateral under the Company's credit agreement with Amegy Bank has limited access to additional financing. Net losses in recent periods have also impacted compliance with the financial covenants under the Amegy Bank credit agreement, further impeding the Company's ability to obtain additional financing. On

March 26, 2020,

the Company entered into a Thirteenth Amendment to Credit Agreement (the “Thirteenth Amendment”) with Amegy Bank. The Thirteenth Amendment amended the minimum net worth covenant to require the Company to maintain tangible net worth (as defined therein) of

$4.0

million, determined on a quarterly basis. Under the Thirteenth Amendment, Amegy Bank also waived an existing default caused by the Company's failure to satisfy the previously required

$20.0

million minimum net worth covenant as of

December 31, 2019.

May 12, 2020,

the Company entered into a Fourteenth Amendment to Credit Agreement (the “Fourteenth Amendment”) with Amegy Bank. The Fourteenth Amendment amended the line of credit to reduce the maximum borrowing capacity to

$3.0

million. Under the Fourteenth Amendment, Amegy Bank also waived an existing default caused by the Company's failure to satisfy both the minimum fixed charge coverage ratio through

March 31, 2020

and minimum tangible net worth as of

March 31, 2020.

The Company obtained waivers from Amegy Bank of its failures to satisfy the fixed charge coverage ratio, the minimum tangible net worth, and the borrowing base for the quarters ended

June 30, 2020

and

September 30, 2020.

November 10, 2020,

the Company entered into a Fifteenth Amendment to Credit Agreement (the “Fifteenth Amendment”) with Amegy Bank. The Fifteenth Amendment waived the minimum tangible net worth covenant until

December 31, 2021,

after which a minimum tangible net worth of

$1.5

million will be required. The Fifteenth Amendment also revised the calculation of the fixed charge coverage ratio such that it will be tested at

December 31, 2020

based on the preceding

six

month period, tested at

March 31, 2021

based on the preceding

nine

month period, and tested at

June 30, 2021

and subsequent periods using a

twelve

month rolling period.

April 15, 2020,

Wilhelmina International, Ltd. (the “Borrower”), a wholly-owned subsidiary of the Company, executed a Business Loan Agreement and a Promissory Note each dated

April 13, 2020 (

collectively, the “Sub PPP Loan Documents”), with respect to a loan in the amount of

$1.8

million (the “Sub PPP Loan”) from Amegy Bank. The Sub PPP Loan was obtained pursuant to the PPP. The Sub PPP Loan originally matured on

April 13, 2022

and bears interest at a rate of

1.00%

per annum. As allowed under the Paycheck Protection Flexibility Act, the Sub PPP Loan was extended to mature on

April 13, 2025

and is payable in

equal monthly payments of

$43

thousand commencing in

August 2021.

April 18, 2020,

the Company executed a Business Loan Agreement and a Promissory Note each dated

April 17, 2020 (

collectively, the “Parent PPP Loan Documents”), with respect to a loan in the amount of

$128

thousand (the “Parent PPP Loan”) from Amegy Bank. The Parent PPP Loan was also obtained pursuant to the PPP. The Parent PPP Loan originally matured on

April 17, 2022

and bears interest at a rate of

1.00%

per annum. As allowed under the Paycheck Protection Flexibility Act, the Parent PPP Loan was extended to mature on

April 17, 2025

and is payable in

equal monthly payments of

thousand commencing in

August 2021.

Both the Sub PPP Loan and the Parent PPP Loan (collectively, the “PPP Loans”)

may

be prepaid at any time prior to maturity with

prepayment penalties. Both the Sub PPP Loan Documents and the Parent PPP Loan Documents contain various provisions related to the PPP, as well customary representations, warranties, covenants, events of default and other provisions. Neither of the PPP Loans is secured by either the Borrower or the Company, and both are guaranteed by the SBA. All or a portion of the PPP Loans

may

be forgiven by the SBA upon application by the Borrower or the Company, respectively, accompanied by documentation of expenditures in accordance with the SBA requirements under the PPP. In the event all or any portion of the PPP Loans is forgiven, the amount forgiven is applied to outstanding principal, and would be recorded as income.

As of

December 31, 2020,

a total of

$2.0

million was outstanding on the PPP Loans.

As of

December 31, 2020,

future maturities of long term debt were as follows (in thousands):

2021			414
2022			738
2023			884
2024			545
2025			136
Total			2,717