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Loan and Security Agreement
6 Months Ended
Jul. 31, 2018
Debt Disclosure [Abstract]  
Loan and Security Agreement

Note 6 - Loan and Security Agreement

 

On September 3, 2014, the Company entered into a Loan and Security Agreement (“Loan and Security Agreement”) with Entrepreneur Growth Capital, LLC (“EGC”) which contains a line of credit. In September 2016, the agreement was amended and the total facility increased to an aggregate principal amount of up to $3,200,000. In June 2018, the line was increased by $300,000. The increase was personally guaranteed by the CEO of the Company. As of July 31, 2018 and January 31, 2018, the outstanding balance on the line of credit was $1,993,481 and $2,702,390, respectively. In May 2018, the agreement was amended to extend the termination date to October 1, 2020.

 

On September 3, 2014, the Company also entered into a 5-year $600,000 Secured Promissory Note (“EGC Note”) with EGC. In September 2016, the ECG Note was increased to $700,000 with an extended maturity date of September 30, 2021. The amended EGC Note is payable in 60 monthly installments of $11,667. The EGC Note was further amended in October 2017 to increase the note to $800,000 with principal payments of $13,795. The EGC Note bears interest at the prime rate plus 4.0% and is payable monthly, in arrears. In the event of default, the Company shall pay 10% above the stated rates of interest per the Loan and Security Agreement. The EGC Note is secured by all of the assets of the Company.

 

Effective June 6, 2018, the Company executed a Secured Promissory Note with EGC which provides for $300,000 in financing with a maturity date of June 1, 2020. The Note provides for 24 monthly payments of $12,500 together with interest on the outstanding balance at Four percent (4%) over the applicable prime rate.

 

The outstanding balance on the term loans was $963,345 and $758,615 as of July 31, 2018 and January 31, 2018, respectively.