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I CROWDERGULF, LLC NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2017 AND 2016 9. LINE OF CREDIT The Company has a line of credit at Regions Bank. In November 2017, the principal amount available under the line of credit was increased to $75,000,000. The line of credit interest rate is based on the 30 day LIBOR index plus a margin of 2% with no floor or ceiling limit. The line of credit is secured by the personal guarantees of John Ramsay and Lyman W. Ramsay, trade"receivables' and investment accounts of CrowderGulf, LLC and its related parties, Edna' inancial�LL�C j nd Edna Financial II, LLC, held at Regions Bank. The line of credit expires in Jul b a.. orcowings ® are limited to a percentage of eligible accounts receivable and investments as determiri d by the i agreement with the bank. The outstanding balance on the line of credit�aDecernber 31, 2017 and 2016 was $51,700,000 and $12,750,000, respectively. \\ 10. SIGNIFICANT RISKS FACTORS The Company's operations consist of disaster respons"—suppor aqd pre-event services, marine operations, coastal restoration and related technical\assistanse_contracts with a number of governmental entities located in the United States' of America, but primarily concentrated in the southeastern part of the country. Due to the de�stton caused by hurricanes and other natural disasters, the governmental entities' ability to m e,et,their finapcial obligations under the contracts is generally dependent upon funding prow ded-by l e\federegovernment. The Company may curtail or cease work under a contract if a governmmentahentity1sunable to secure such funding in a timely manner. 11. SELF-INSURANCE The Company is self-psure\fov workers' compensation claims. The self-insured limit is $25,000 Iper occurrence or per Iossfrorn a covered cause of loss. Claims exceeding $25,000 per occurrence are covered through a\pti�teesurance carrier. Coverage limits under the policy include $1,000,000 bodily, ittfury–forseach accident and $1,000,000 bodily injury by disease for each ® employee with_an aggregate $1000,000 policy limit. Liabilities are reported when it is probable that !� a loss has occur edndth amount of the loss can be reasonably estimated. /( 12.,CONTINGENCIES fihe Company is involved in a legal proceeding, arising in the normal course of business. In the opinion o)rnanagement, based upon consultation with legal counsel, the ultimate resolution of thee_proceedings will not have a material effect on the Company's financial statements. I I i 12