LONG-TERM LIABILITIES

12 Months Ended

Jun. 03, 2016

Debt Disclosure [Abstract]

Long Term Liabilities

NOTE 8 – LONG-TERM LIABILITIES

The Company has two notes payable with a local bank. The agreement on the note payable maturing March 10, 2021, contains a financial covenant for minimum tangible net worth of $16 million. The Company was in compliance with the financial covenant as of June 3, 2016. Debt outstanding as of June 3, 2016 and May 29, 2015, consisted of the following:

	2016		2015
Note payable maturing March 10, 2021 interest at 3.00%, principal and interest due monthly	$	4,587,642	$	4,944,233
Note payable maturing January 31, 2020 interest at 3.30%, principal and interest due monthly		1,600,640		2,068,484
Less current portion of long-term debt		(837,225)		(799,204)
Total long-term debt	$	5,351,057	$	6,213,513

In July 2015, a capital lease obligation of $98,586 was incurred when the Company entered into a 36-month lease for new server equipment. In March 2016, another capital lease obligation of $140,796 was incurred when the Company entered into a 60-month lease for new telephone equipment. The balance of the capital lease obligations was $208,412 as of June 3, 2016 with the current portion of $56,203.