9. DEBT

Debt consists of the following:

	February 28 (29),
	2017			2016

Line of credit	$	4,882,900		$	3,331,800

Long-term debt	$	21,564,300		$	18,302,800
Less current maturities		(898,500	)		(615,400	)
Long-term debt, net of current maturities	$	20,665,800		$	17,687,400

We have a Loan Agreement with MidFirst Bank (“the Bank”) which includes multiple loans. Term Loan #1 is comprised of Tranche A totaling $13.4 million and Tranche B totaling $5.0 million, both with the maturity date of December 1, 2025. Tranche A has a fixed interest rate of 4.23% and interest is payable monthly. For Tranche B, interest is payable monthly at the bank adjusted LIBOR Index plus 3.25% (4.03% at February 28, 2017). Term Loan #1 is secured by the primary office, warehouse and land.

We also have Term Loan #2 with the Bank in the amount of $4.0 million with the maturity date of June 28, 2021, and interest payable monthly at the bank adjusted LIBOR Index plus 3.25% (4.03% at February 28, 2017). Term Loan #2 is secured by our secondary warehouse and land. The Loan Agreement also provides a $7.0 million revolving loan (“line of credit’) through June 15, 2017 with interest payable monthly at the bank adjusted LIBOR Index plus 3.25% (4.03% at February 28, 2017). The President and Chief Executive Officer and his wife have executed a Guaranty Agreement obligating them to repay $3,680,000 of any unpaid Term Loans, unpaid accrued interest and any recourse amounts as defined in the Continuing Guaranty Agreement.

The Tranche B, the line of credit and the Term Loan #2 accrue interest at a tiered rate based on our funded debt to EBITDA ratio (“ratio”) which is payable monthly. The current pricing tier is as follows:

Pricing Tier	Adjusted Funded Debt to EBITDA Ratio	LIBOR Margin (bps)
I	>3.25	362.50
II	>2.75 but <3.25	350.00
III	>2.25 but <2.75	337.50
IV	<2.25	325.00

EBITDA is defined as earnings before interest expense, income tax expense (benefit) and depreciation and amortization expenses.

We had $4,882,900 and $3,331,800 in borrowings outstanding on our revolving credit agreement at February 28, 2017 and February 29, 2016, respectively. Available credit under the revolving credit agreement was $2,117,100 at February 28, 2017 and $668,200 at February 29, 2016.

The Loan Agreement also contains a provision for our use of the Bank’s letters of credit. The Bank agrees to issue, or obtain issuance of commercial or stand-by letters of credit provided that no letters of credit will have an expiry date later than June 15, 2017, and that the sum of the line of credit plus the letters of credit would not exceed the borrowing base in effect at the time. For the year ended February 28, 2017, we had no letters of credit outstanding.

The Loan Agreement contains provisions that require us to maintain specified financial ratios, restrict transactions with related parties, prohibit mergers or consolidation, disallow additional debt, and limit the amount of compensation, salaries, investments, capital expenditures, leasing transactions and the amount of distributions we can make on a quarterly basis. Additionally, the Loan Agreement suspends dividends and stock buybacks.

The following table reflects aggregate future maturities of long-term debt during the next five fiscal years and thereafter as follows:

Year ending February 28,
2018	$	898,500
2019		952,200
2020		989,600
2021		1,026,500
2022		1,069,000
Thereafter		16,628,500
	$	21,564,300