Debt

Debt at

December 31, 2018

and

2017

consists of the following:

	2018		2017

Term loan	$	-	$	2,545,421
Revolving line of credit		-		500,000
		-		3,045,421
Less current maturities		-		3,045,421
Long-term portion	$	-	$	-

Effective

September 30, 2015,

the Company entered into a series of lending agreements with a new primary lender which included agreements for a

$3.25

million term loan and

$3.5

million revolving credit facility. These lending agreements replaced similar borrowings under agreements with the Company’s former primary lender.

The

$3.25

million term loan was for a period of

three

years and required monthly term loan payments, under a

ten

-year amortization, consisting of principal of

$27,080

plus interest with a balloon payment for the outstanding balance due and payable on

September 30, 2018.

The term loan’s interest rate was based on the

-day LIBOR plus

2.25%.

The

$3.5

million revolving line of credit agreement, originally dated

September 30, 2015,

and subsequently amended and extended, accrues interest at a floating interest rate based on the

-day LIBOR plus

2.25%

and had an original term of

one

year.

June 30, 2018,

the Company was current on all principal and interest due to its lender. In

July 2018,

management voluntarily elected to redeem the cash surrender value (CSV) of the Company’s whole life insurance policy maintained on the life of the Company’s Board of Directors’ Chairman and former Chief Executive Officer. Upon redemption and related receipt of the

$3.07

million CSV proceeds, the Company simultaneously remitted to its lender

$2.86

million of the CSV proceeds to be applied towards the full reduction of its outstanding term loan and revolver balances. Following this series of

July 2018

transactions, the balances of the Company’s term loan, revolver loan, and life insurance policy balances were

zero

Effective with a

September 11, 2018

amendment, the revolving line of credit’s maximum borrowing amount was reduced from

$2.0

million to

$750,000.

As amended, the revolver’s maturity date remained

April 29, 2019

and the revolver’s interest rate continued to be based on the

-day LIBOR plus

2.25%.

As of

December 31, 2018,

there were

outstanding borrowings on the revolving line of credit. In

January 2019,

the Company borrowed

$500,000

under its revolving line of credit.

Effective with a

March 2019

amendment, the revolving line of credit’s maturity date was extended to

April 28, 2020

and the interest rate was revised to the

-day LIBOR plus

3.00%.

As amended, the revolver’s maximum borrowing amount remains

$750,000.

Borrowings under the lending agreement are secured by all tangible and intangible assets of the Company and by a mortgage on the real estate of the Company’s headquarters. At

December 31, 2018,

the Company was in compliance with its loan covenant requirements.