On the Company entered into a revolving line of credit agreement with TD Bank providing for demand or short-term borrowings up to The credit agreement includes an interest rate indexed to above the Intercontinental Exchange Benchmark Administration Ltd. London Interbank Offered Rate. The line of credit will expire on The total amount allowed to be drawn against the line is limited by varying percentages of the Company’s eligible accounts receivable. At the limit would have been approximately The bank is granted a security interest in all of the Company’s assets if there are borrowings under the line of credit. Interest on outstanding balances is payable monthly. The effective rate at was

 

The bank has a priority security interest in the Company’s receivables and a direct assignment of its U.S. federal government contracts. Under the line of credit agreement, the Company is bound by certain covenants, including maintaining a minimum tangible net worth and producing a number of periodic financial reports for the benefit of the bank. At the Company failed to maintain the required minimum tangible net worth under a covenant with its lender. The Company has secured a waiver of the violation of the covenant from its lender. The Company is working with its lender to renew the line of credit prior to its expiration.  A renewal is likely to include modified terms to the credit agreement, including increased frequency of reporting to its lender and new covenants. Failure to agree to terms with the lender on a renewal, however, will leave the Company unable to borrow working capital after the line of credit expires, should the need arise.

 

There was outstanding balance on the line of credit at or