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NOTE 6 - NOTES PAYABLE | 9 Months Ended
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Sep. 30, 2018
Debt Disclosure [Abstract] |
Debt Disclosure [Text Block] | NOTE 6 – NOTES PAYABLE The following table summarizes our outstanding debt as of the dates indicated:
Notes Payable |  | Maturity |  | Stated Interest Rate |  |  | Balance as of September 30, 2018 |  |  | Balance as of December 31, 2017 |
Subordinated Notes Payable- acquisitions |  | 10/1/2019 – 5/25/2022 |  |  | 2.00% - 3.50 | % |  |  | 12,164 |  |  |  | 9,847 |
Term Loan – Wells Fargo Syndicate Partner |  | 5/25/2022 |  |  | 10.55 | % |  |  | 52,238 |  |  |  | 34,125 |
Term Loan - Wells Fargo |  | 5/25/2022 |  |  | 5.55 | % |  |  | 52,238 |  |  |  | 34,125 |
Total Notes Payable |  |  |  |  |  | $ | 116,640 |  |  | $ | 78,097 |
Short-term notes payable |  |  |  |  |  | $ | 5,374 |  |  | $ | 8,895 |
Long-term notes payable |  |  |  |  |  | $ | 111,266 |  |  | $ | 69,202 |
On January 1, 2016, we adopted ASU 2015-03 for debt issuance costs on our term loan, on a retrospective basis. The impact of adopting ASU 2015-03 was the classification of all deferred financing costs as a deduction to corresponding debt in addition to the reclassification of deferred financing costs in other current and long-term assets to short and long-term notes payable. The following table summarizes the debt issuance costs as of the dates indicated:
Notes Payable |  | Gross Notes Payable at September 30, 2018 |  |  | Debt Issuance Costs and Debt Discount |  |  | Net Notes Payable at September 30, 2018 |
Notes payable, current portion |  | $ | 5,374 |  |  | $ | (872 | ) |  | $ | 4,502 |
Notes payable, net of current portion |  |  | 111,266 |  |  |  | (2,700 | ) |  |  | 108,566 |
Total Notes Payable |  | $ | 116,640 |  |  | $ | (3,572 | ) |  | $ | 113,068 |
Notes Payable |  | Gross Notes Payable at December 31, 2017 |  |  | Debt Issuance Costs and Debt Discount |  |  | Net Notes Payable at December 31, 2017 |
Notes payable, current portion |  | $ | 8,895 |  |  | $ | - |  |  | $ | 8,895 |
Notes payable, net of current portion |  |  | 69,202 |  |  |  | (2,229 | ) |  |  | 66,973 |
Total Notes Payable |  | $ | 78,097 |  |  | $ | (2,229 | ) |  | $ | 75,868 |
The following table summarizes the future principal payments related to our outstanding debt:
Year Ended |  | Gross Amount |
December 31, 2018 (October to December) |  | $ | 633 |
December 31, 2019 |  |  | 6,026 |
December 31, 2020 |  |  | 5,197 |
December 31, 2021 |  |  | 8,151 |
December 31, 2022 |  |  | 96,633 |
Gross Notes Payable |  | $ | 116,640 |
Term Loan - Wells Fargo In March 2014, we entered into a credit agreement (the “Credit Agreement”) with Wells Fargo, as administrative agent, and the lenders that are party thereto. The Credit Agreement contains customary events of default, including, among others, payment defaults, covenant defaults, judgment defaults, bankruptcy and insolvency events, cross defaults to certain indebtedness, incorrect representations or warranties, and change of control. In some cases, the defaults are subject to customary notice and grace period provisions. In March 2014 and in connection with the Credit Agreement, we and our wholly-owned active subsidiaries entered into a Guaranty and Security Agreement with Wells Fargo Bank. Under the Guaranty and Security Agreement, we and each of our wholly-owned active subsidiaries have guaranteed all obligations under the Credit Agreement and granted a security interest in substantially all of our and our subsidiaries’ assets. Second Amended and Restated Credit Agreement In March 2018, we entered into a second amended and restated credit agreement (the “Second Restated Credit Agreement”) with Wells Fargo, and the lenders that are parties thereto, amending and restating the terms of the Amended and Restated Credit Agreement dated as of May 2017. The Second Restated Credit Agreement provides for a total of $175,000 in available financing consisting of (a) $105,000 in the aggregate principal amount of term loans, an increase of approximately $36,750; (b) a $5,000 line of credit, (c) a $25,000 delayed draw term loan commitment for the financing of permitted acquisitions, which is a new financing option for us; and (d) a $40,000 accordion, an increase of $30,000. The accordion allows us to increase the amount of financing we receive from our lenders at our option. Financing under the delayed draw term loan commitment and accordion are subject to certain conditions as described in the Second Restated Credit Agreement. The Second Restated Credit Agreement amends the applicable margin rates for determining the interest rate payable on the loans as follows:
Leverage Ratio | First Out Revolver Base Rate Margin | First Out Revolver LIBOR Rate Margin | First Out TL Base Rate Margin | First Out TL LIBOR Rate Margin | Last Out Base Rate Margin | Last Out LIBOR Rate Margin
≤ 3.25:1 | 4.25 percentage points | 5.25 percentage points | 1.75 percentage points | 2.75 percentage points | 6.75 percentage points | 7.75 percentage points
> 3.25:1 | 4.75 percentage points | 5.75 percentage points | 2.25 percentage points | 3.25 percentage points | 7.25 percentage points | 8.25 percentage points
The outstanding principal amount of the term loans is payable as follows:
● | $263 beginning on June 30, 2018 and the last day of each fiscal quarter thereafter up to March 31, 2020, plus an additional amount equal to 0.25% of the principal amount of all delayed draw term loans;
● | $656 beginning on June 30, 2020 and the last day of each fiscal quarter thereafter up to March 31, 2021, plus an additional amount equal to 0.625% of the principal amount of all delayed draw term loans; and
● | $1,313 beginning on June 30, 2021 and the last day of each fiscal quarter thereafter, plus an additional amount equal to 1.25% of the principal amount of all delayed draw term loans.
The outstanding principal balance and all accrued and unpaid interest on the term and revolving loans is due on May 25, 2022. The Second Restated Credit Agreement also:
● | amends our leverage ratio covenant to increase the maximum ratio to 6.50:1 at March 31, 2018 and June 30, 2018, 6.00:1 at September 30, 2018 and December 31, 2018 and then stepping down each quarter-end thereafter;
● | amends our fixed charge coverage ratio to be not less than 1.25:1 at March 31, 2018 and each quarter-end thereafter; and
● | removes the TTM recurring revenue covenant.
As of September 30, 2018 and December 31, 2017, $0 was outstanding and $5,000 was available for borrowing under the revolver. As of September 30, 2018, we were in compliance with all covenants and all payments remain current. We expect to be in compliance or be able to obtain compliance through debt repayments with available cash on hand or cash we expect to generate from the ordinary course of operations over the next twelve months.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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