Note 11 – Long-term Debt

Commercial Loan

On August 22, 2019, the Company, entered into an amended and restated loan agreement with Patriot Bank, N.A. Under the Amended and Restated Loan Agreement, the Company’s outstanding $5,000,000 term loan and $3,500,000 line of credit were consolidated and combined into a term loan in the principal amount of $16,000,000 (the Commercial Loan”). As a result, the Company recognized a loss on extinguishment of $350,691 for the year ended December 31, 2019.

The Commercial Loan is evidenced by a consolidated, amended and restated term promissory note (“Note”). Subject to the terms of the Note, the Commercial Loan bears interest, payable monthly in arrears, at a fixed rate of 5.75% per annum. (which amount increased to 6.25% in March 2020 due to our failure to maintain a minimum cash deposit with Patriot Bank, N.A.) The outstanding principal amount of the Commercial Loan is repayable in consecutive monthly installments in equal amounts of $266,667, which commenced on October 1, 2019 and continues on the same date of each subsequent month thereafter during the term of the Commercial Loan. The Commercial Loan matures on September 1, 2024.

Pursuant to the Amended and Restated Loan Agreement, at closing the Company paid to Patriot Bank, N.A. an aggregate of approximately $179,000, representing a commitment fee of $85,000, a payment of $25,556 of interest due on the Commercial Loan for the 9 days of the month of August 2019 and $68,090 in fees paid to Patriot Bank’s counsel.

Revolving Credit Facility

On October 11, 2019, the Company consummated the creation of the majority owned subsidiary Landmark Studio Group. Through and in connection with the creation of the Landmark Studio Group subsidiary, the Company entered into a Revolving Credit Facility (“Revolving Credit Facility”) with Cole Investments VII, LLC. The Revolving Credit Facility consists of a revolving line of credit in the amount of $5,000,000 and bears interest of 8% per annum. The outstanding principal is repayable in full on October 10, 2022, the maturity date. At the option of the lender, the loan is repayable in cash or additional equity in the subsidiary. The loan is not collateralized by any assets of the Company.

Long-term debt for the periods presented was as follows:


	March 31,		December 31,
	2020		2019
Commercial Loan	$	14,400,000	$	15,200,000
Revolving Credit Facility		5,000,000		5,000,000
Total Debt		19,400,000		20,200,000
Less: debt issuance costs		179,373		189,525
Less: current portion		3,200,000		3,200,000
Total long-term debt	$	16,020,627	$	16,810,475

The Amended and Restated Loan Agreement includes customary financial covenants, restrictions and interest rate covenants including delivery of financial statements, maintaining an account at Patriot Bank, N.A. with an average balance of $2,500,000 in any trailing 90-day period or the interest rate will increase by 0.50% and maintaining a minimum debt service coverage ratio of 1.25 to 1.0. The Company did not maintain an average balance of $2,500,000 during the 90-day trailing period ended March 31, 2020 and did not cure such failure within 30 days, and as a result the interest rate increased by 0.50%, from 5.75% to 6.25%. The Company was in compliance with all other covenants as of March 31, 2020 and December 31, 2019, respectively.

As of March 31, 2020, the expected aggregate maturities of long-term debt for each of the next five years are as follows:



Remainder of 2020	$	2,400,000
2021		3,200,000
2022		8,200,000
2023		3,200,000
2024		2,400,000
	$	19,400,000