15.

WORKING CAPITAL LINE OF CREDIT

CUI, Inc. and CUI-Canada have a line of credit (LOC) whose terms with Bank of America Merrill Lynch are as follows:

(in thousands)
Credit Limit		June 30, 2019 Balance			Expiration Date	Interest rate

$	10,000	$	6,450	(1)	March 31, 2021	LIBOR Daily Floating Rate plus 2.00%

(

)

As a result of the Company’s cash management system, checks issued but

not

presented to the bank for payment

may

create negative book cash balances. When those checks are presented for payment if there isn't sufficient cash in the bank account, the checks would be honored by the bank with a corresponding increase to CUI's draw on its line of credit. There were

negative book cash balances included in the balance on the line of credit as of

June

30,

2019.

The line of credit is secured by the following collateral via a security agreement with CUI Inc. and CUI-Canada at

June

30,

2019:

(in thousands)

CUI Inc. and CUI-Canada General intangibles, net	$	8,321
CUI Inc. and CUI-Canada Accounts receivable, net	$	8,864
CUI Inc. and CUI-Canada Inventory, net	$	10,506
CUI Inc. and CUI-Canada Equipment, net	$	666

The borrowing base for the line of credit is based on a percent of CUI Inc. and CUI-Canada's inventory plus a percent of CUI Inc.'s accounts receivable.

CUI Global, Inc., the parent company, is a payment guarantor of the LOC. Other terms included in this revolving line of credit for CUI prohibit dividend payments to shareholders except dividends payable in capital stock and from earnings available for such purposes and earned during the immediately preceding fiscal year, and in any event,

not

in excess of

five million

dollars per fiscal year in the aggregate. The LOC does

not

require repayment until maturity although the Company at its option can repay and re-borrow amounts up to the LOC limit. The LOC contains certain financial covenants.