In October 2010, the Company entered into a Loan and Security Agreement (“Credit Agreement”) with an affiliate of Capital One, National Association (“Capital One” or the “Bank”). The Credit Agreement, as amended and restated in April 2017 and further amended from time-to-time, among other things, provides the ability to borrow funds under a $16,000,000 revolver line (“Revolver”), subject to certain borrowing base criteria. Additionally, there is a $2,000,000 line of credit for capital expenditures (“Capex Loan”), with $1,600,000 available for future borrowings. Revolver and Capex Loan borrowings are secured by the Company’s accounts receivable, inventory, equipment, and real property, among other things. P&F and certain of its subsidiaries are borrowers under the Credit Agreement, and their obligations are cross guaranteed by certain other subsidiaries. The Credit Agreement expires on February 8, 2024.

On April 12, 2022, we entered into Amendment No. 10 ("Amendment No. 10") to the Credit Agreement.

Until the effective date of Amendment No. 10, at the Company’s option, Revolver borrowings would bear interest at either LIBOR or the Base Rate, as the terms are defined in the Credit Agreement, plus an Applicable Margin, as defined in the Credit Agreement. Additionally, the Company was subject to limitations on the number of LIBOR borrowings. As noted above, Amendment No. 10, the Company would be required to use SOFR rates instead of LIBOR. The Company will continue to be subject to the number of SOFR borrowings. The Company does not believe that this change from LIBOR to SOFR will have a significant effect on its consolidated financial statements.

The Company provides Capital One with monthly borrowing base certificates, and in certain circumstances, it is required to deliver monthly financial statements and certificates of compliance with various financial covenants. Should an event of default occur the interest rate would increase by two percent per annum during the period of default, in addition to other remedies provided to Capital One.

At March 31, 2022, short-term or Revolver borrowing was $12,522,000, compared to $5,765,000 at December 31, 2021. (See Note 2, for further discussion related to this increase. Applicable Margin Rates at March 31, 2022 were 1.50% and 0.50%, respectively for LIBOR and Base Rate borrowings. At December 31, 2021, these rates were 1.50% and 0.50%, respectively for LIBOR and Base Rate borrowings. Additionally, at March 31, 2022, and December 31, 2021, there was approximately $3,360,000 and $9,578,000, respectively, available to the Company under its Revolver arrangement.

The average balances of short-term borrowings from our Bank for the three -month periods ended March 31, 2022 and 2021, were $10,157,000 and $2,167,000, respectively.