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Note 8 - Lines of Credit
9 Months Ended
Sep. 30, 2019
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block]

Note 8 - Lines of Credit


On September 19, 2017, Diamond Bar extended the line of credit up to a maximum of $8,000,000 to mature on June 1, 2019. The annual interest rate was 5.50% as of June 30, 2019. The line of credit was secured by all of the assets of Diamond Bar and is guaranteed by Nova LifeStyle. As of September 30, 2019 and December 31, 2018, Diamond Bar had $0 and $6,248,162 outstanding on the line of credit, respectively.  During the nine months ended September 30, 2019 and 2018, the Company recorded interest expense of $35,444 and $92,524, respectively; and $0 and $36,696 for the three months ended September 30, 2019 and 2018, respectively. The Company paid off the lines of credit during the nine months ended September 30, 2019.


As of September 30, 2019, we do not have any lines of credit.


The Diamond Bar loan had the following covenants: (i) maintain a minimum tangible net worth of not less than $20 million; (ii) maintain a ratio of debt to tangible net worth not in excess of 2.5 to 1.0; (iii) the pre-tax income must be not less than 1% of total revenue quarterly; and (iv) maintain a current ratio in excess of 1.25 to 1.00. As of December 31, 2018, Diamond Bar was in compliance with the stated covenants.