NOTE 5. LONG-TERM DEBT

Long-term debt is comprised of the following:

	March 31,		December 31,
	2016		2015
Real estate loans (net of debt issuance costs discount of $4,427)	$	7,503,490	$	7,590,042
Hard Rock Note (net of $229,776 and $261,493 discount, respectively)		9,270,224		9,738,521
Line of credit (net of debt issuance costs discount of $48,580)		194,136		-
Machinery loans		1,317,695		857,947
Transportation loans		622,966		658,430
		18,908,511		18,844,940
Current portion of long-term debt		(4,917,684)		(2,636,241)
	$	13,990,827	$	16,208,699

New Credit Agreement - Effective March 8, 2016, the Company announced the completion of a $3 million credit facility, pursuant to a Loan and Security Agreement among us and certain of our subsidiaries, as the borrowers, and Federal National Commercial Credit (“FNCC”), as the lender. The credit facility is comprised of a two year $2.5 million accounts receivable revolving promissory note and a $500,000 term promissory note. This credit facility includes a validity guarantee executed by Troy Meir.

The accounts receivable revolving promissory note has availability of up to 85% of eligible accounts receivable of the borrowers. This note has a variable interest rate of prime plus 1% plus a monthly service fee of 0.48% of the current outstanding balance on the note.

The term loan is for a period of 60 months with monthly payment of $8,333, which includes principal and interest, with a balloon payment at the end of the term. This note carries an interest rate of prime plus 5% plus a monthly service fee of 0.30% of the outstanding balance.

The credit facility also includes the following debt covenants: (a) Fixed Charge Coverage Ratio of not less than 0.10 tested monthly from June 30 through August 31, 2016, then 0.35 for September 30 and October 31, 2016, and then 1.00 for November 30, 2016 and each month thereafter; (b) Debt-to-Tangible Net Worth of not greater than 4.35 tested monthly from April 30 through August 31, 2016 and then 4.25 for September 30, 2016 and each month thereafter; and (c) Liquid Ratio of at least 0.325 tested monthly from April 30 through September 30, 2016 and then 0.40 for October 30, 2016 and each month thereafter.

As of March 31, 2016, the outstanding balance of the revolving promissory note and term promissory note was $242,716 and $500,000, respectively. The net availability from the revolving promissory note as of March 31, 2016 was approximately $485,000.

On May 12, 2016 the Company and FNCC entered into an amendment to the credit agreement changing the following: (a) Fixed Charge Coverage Ratio of not less than 0.10 tested monthly from July 30 through August 31, 2016, then 0.35 for September 30 and October 31, 2016, and then 1.00 for November 30, 2016 and each month thereafter; (b) Debt-to-Tangible Net Worth of not greater than 4.35 tested monthly from June 30 through August 31, 2016 and then 4.25 for September 30, 2016 and each month thereafter; and (c) Liquid Ratio of at least 0.325 tested monthly from June 30 through September 30, 2016 and then 0.40 for October 30, 2016 and each month thereafter.