Note 10 - Revolving Credit Facility
Effective October 1, 2013, the Company closed a $5 million revolving credit financing facility with TCA Global Credit Master Fund (TCA). On October 1, 2013, the Company took an initial draw down on the line of $1.3 million. The Company used the funds to purchase selected assets from a privately held Company, as well as to pay the related deal and transaction fees and to increase its traffic acquisition programs. At May 31,2015 the Company had $907,845 outstanding relating to the total draw of $1.7 million. At May 31, 2015, 2014 the Company had $3.3 million available under the credit facility. The credit facility may be drawn down, at the investor’s sole discretion subject to a use of proceeds or other investor defined metric such as Company financial performance metric or other investor defined metric. Standard requested draw-downs shall not exceed 80% of the repayments made to TCA unless the requested draw down is relating to a proposed acquisition. In the event of an acquisition funding request TCA may consider the financial performance of the target company, along with other metrics in order to determine whether or not to release additional funds under the facility. There are no contractual guarantees or formal metric specific obligations that require TCA to provide the Company with access to additional draw downs. Future draw-downs of the credit facility are to be made solely at the discretion of the managers at TCA. The Company may also need to raise additional funds through private placements of its equity securities to pay down the revolving credit facility that may involve dilution to our existing stockholders. The Company has no plans to make additional draw downs on the Credit Facility in 2015 or beyond. We are currently in default of our credit facility with TCA. We are actively negotiating an amendment with TCA to resolve the default. We cannot however guarantee the outcome of these negotiations
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