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7. Debt
12 Months Ended
Dec. 31, 2017
Debt Disclosure [Abstract]  
Debt

We have a $500,000 line of credit with a variable interest rate computed on a 360-day year. The variable interest rate is the higher of either 1) the Prime Rate in effect on such day, 2) Daily One Month LIBOR plus one and one-half percent (1.5%), or 3) the Federal Funds Rate plus one and one-half percent (1.5%). The line of credit agreement requires us to comply with various financial covenants as well as customary affirmative and negative covenants that restrict our ability to, among other things, incur debt and liens, make significant investments, dispose of assets and make distributions without prior consent. The line of credit is secured by accounts receivable. The line of credit contains certain financial covenants, including a fixed charge coverage ratio and a tangible net worth. At December 31, 2017, we were in compliance with all of the financial covenants under the line of credit.

 

In 2016, the Company entered into a financing arrangement to fund portions of its insurance premiums. As of December 31, 2016, the Company had a remaining outstanding obligation associated with this funding totaling $35,778, exclusive of accrued interest totaling $1,034, included in the current portion of notes payable in the accompanying consolidated balance sheet. The Company did not have any such financing arrangements as of December 31, 2015 and incurred immaterial interest expense for the year ended then.

 

The Company did not have any such financing arrangements as of December 31, 2017.

 

As of December 31, 2017, we had no amount outstanding under the line of credit.