NOTE 8. SENIOR DEBT

The Company’s senior credit facility, the (“Facility”) as amended provides financing at the discretion of the lender with an interest rate of 12% paid quarterly in arrears and includes a “payment in kind” (PIK) provision providing a 4% per annum increase in the principal balance monthly. The Facility is due on March 31, 2019 and is secured by all assets of the Company.

During January 2018, the Company received $23 for a note under the terms of the facility and converted $867 in PIK interest and $110 in debt discount into principal, all due March 31, 2019.

The Company recognized $1,096 and $249 in interest expense from the amortization of original issuance discounts and deferred financing costs during the three months ended March 31, 2018 and 2017, respectively, and $4,370 and $5,429 remained unamortized as of March 31, 2018 and December 31, 2017, respectively.  

The Company is in compliance with its debt covenants.